A DIFFerence of Opinion: Cancellation of the Development Import Finance Facility


Current Issues Brief 20 1995-96

Dr Ravi Tomar
Foreign Affairs, Defence and Trade Group

Contents

Introduction

Background

Changes in DIFF Rules

The DIFF Debate

Nature of DIFF Allocations

Effectiveness of DIFF

The Cancellation of DIFF

Conclusion

Endnotes

Appendix

Introduction

The Development Import Finance Facility (DIFF) has proved to be one of the most controversial elements of the Australian aid program, attracting strong criticism and equally strong support. It is a 'mixed credit' or 'associated financing' scheme which enables Australian companies to tender competitive contracts for the supply of Australian goods and services for projects in developing countries. The DIFF grant, usually equal to 35 per cent of the value of a contract, is combined with export credit from the Export Finance Insurance Commission (EFIC) of Austrade to provide a concessional loan to recipient country.

The DIFF scheme was cancelled following the change of government in March. Although no formal announcement appears to have been made, its cancellation was foreshadowed in a pre-election media release by the then Shadow Treasurer, Peter Costello.(1) Reaction from various groups with an interest in the aid budget, including the Australian Council for Overseas Aid (ACFOA),(2) has been largely negative. Given the concern that has been generated by the discontinuation of DIFF, it is likely to remain an issue for some time.

Background

It can be seen from table one that there has been a steady decline in Australia's Official Development Assistance (ODA) over the last decade and that it is currently below the United Nations target of 0.7 per cent of Gross Domestic Product (GDP).

In 1995-96, Australia's aid expenditure is forecast to be $1563.2 million, an increase of about $83 million over the 1994-95 outlay. In real terms this represents a growth of 1.8 per cent or $28 million. However, due to the growth of the Australian economy, the ratio of the volume of Official Development Assistance to the Gross National Product (the ODA/GNP ratio) will actually decline from 0.34 per cent in 1994-95 to 0.33 in 1995-96. While Australia's GNP per capita in real terms has increased from $19 800 in 1983-84 to an expected $25 500 in 1995-96, aid expenditure over the same period has declined from $99 to about $82 per capita.(3)

In 1988-89 there was a one-off forward of multilateral development bank (MDB) payments. This had the effect of increasing 1988-89 expenditure but decreasing 1989-90 expenditure.

Source: Australia's Overseas aid Program 1995-96, Budget Related Paper No. 2.

The decline in the aid budget has also had an impact on its commercial aspects. According to ACFOA:(4)

The Government defends the increasing commercial elements in the program by pointing to the declining political commitment to aid and arguing that a broader base of support needs to be developed for the aid program.

Nonetheless, Australia's contribution at over $1.56 billion is by no means among the lowest in the donors list. It ranks 9th in terms of ODA/GNP ratio among the 21 countries that form the Development Assistance Committee (DAC) of the Organisation for Economic Cooperation and Development (OECD). In contrast, Japan, which has an aid budget of over $15 billion, ranks 16th.(5)

The Australian budget is split into country (bilateral) programs and global programs which include funding for international organisations, (multilateral aid), emergencies, aid to Non Government Organisations (NGOs) and for commercial activity. In 1995-96, country programs accounted for about 56 per cent of the total budget while 35 per cent was allocated to global programs. Other development activities absorb about 3 per cent and the Australian Centre for International Agricultural Research (ACIAR) receives another 3 per cent.

In what could be described as a tacit spheres-of-influence arrangement among Development Assistance Committee (DAC) donors, Australia has for long had a regional focus on its aid program. This concentration makes for greater cost-effectiveness and impact per aid dollar by reducing the administrative overheads of a wider spread. As a relatively small donor, Australia, for example, leaves Africa and Latin America largely to the big donors with traditional interests in those areas.

In 1995-96, more than 77 per cent of the expenditure will be directed towards Southeast Asia and the Pacific. While at first glance this figure might look impressive, it is also deceptive. Of the total country program budget of nearly $876 million, Papua New Guinea alone receives over $312 million, or over 35 per cent.

Countries in Southeast Asia and the South Pacific account for 29 per cent and 13 per cent of the country program budget respectively. Some $38.5 million, or less than 5 per cent of the program development aid, is destined for Africa although the continent remains a major recipient of Australia's humanitarian assistance.

The contribution of NGOs was also recognised in this year's budget. Total funding for NGOs is expected to be over $100 million compared to about $97.6 million in 1994-95. The outlay for humanitarian assistance too has been increased by $10.5 million to $84 million.

By contrast the expenditure of DIFF would have been reduced to $120 million from $130 million in 1994-95.

The decision to introduce DIFF was taken in 1980, with the first project being approved in 1982, as a response to the mixed credit programs of other OECD donors. These programs had been initiated by many countries in the late 1960s, and by 1982 they accounted for about 6 per cent of total OECD bilateral Overseas Development Assistance. Initially, the Australian scheme was directed at ASEAN countries and was to be used to support those industries which were already internationally competitive. The main objective was to match concessional financing being provided by other countries and thus to help Australian firms compete for aid projects.

A secondary objective was to help develop new markets for Australian exporters. While the original intention was not to subsidise manufacturers, benefits to Australian industry being seen as ancillary to this objective, there was a concern that Australia aid would be good for Australia too. For example, where Australian goods and services could be used in Australian aid projects, they should be used for this purpose as long as the result was not to reduce their quality as good aid. Some questions about this remaining the case, however, emerged with the changes in the administration of DIFF which could be seen to have resulted in the commercial aspects rivalling the development intent.

Source: AIDAB/AusAID, Australia's Overseas Aid Program: Statistical Summary, 1989/90 to 1994/95 (various issues).

Changes in DIFF Rules

The first DIFF project was approved in 1982 and, during the same year, the eligibility criteria was broadened from just the ASEAN region to all countries receiving Australian aid. In 1983, the conditions attached to DIFF grants were relaxed further. The requirement for applicants to demonstrate aid-supported competition for specific projects was dropped; all that was now required was sufficient evidence of foreign donor competition in the country concerned. By 1987 it had been decided that the DIFF/EFIC financing package could be tailored to suit the needs of the recipients. Also, Burma, China, India, Indonesia, Malaysia, Pakistan, Philippines, Sri Lanka and Thailand were declared by AIDAB to be 'spoiled markets'. (The markets were considered to be 'spoiled' by the volume of aid-supported financial packages available from other donors). This meant that DIFF was available without the need of evidence of aid-supported competition for capital goods. Such evidence was, however, required for services and non-capital goods.

Another review in 1989 led to further changes with the aim of increasing the effectiveness of the scheme. Feasibility studies had to be carried out, which were then appraised by AusAID using the same criteria as that used for bilateral grant aid projects. DIFF funding could be denied in cases where assistance had been provided in the same sector and, in some cases, the same region of a recipient country. Further, 90 per cent of each year's funding would be used to support activities in Australia's region with a maximum of 40 per cent of DIFF funds to be allocated to any one country.

In February 1992, a new set of international guidelines established by the OECD, the 'Helsinki rules' came into effect. The aim of these guidelines was to direct mixed credit financing away from commercially viable projects toward projects and countries that had little chance of access to private funds. The guidelines also have a provision that allows any OECD member to call for consultations and 'challenge' another member to prove that their project conforms to the revised rules. The effectiveness of these rules is apparent by the fact that by June 1994, about 20 per cent of the total notifications regarding mixed credit financing to the Development Assistance Committee (DAC) of the OECD had resulted in consultations.

Under current Australian guidelines, to be eligible for DIFF funding, a project must:(6)

  • be accorded priority under the recipient government's development plan
  • demonstrably contribute to the recipient government's economic and social development objectives
  • be consistent with Australia's development assistance objectives, including environmental, social, cultural and gender specific objectives
  • be financially and economically viable
  • goods and services being provided must be wholly or mainly of Australian origin.

In addition, funding must be proven to be necessary and justifiable to match officially aid-supported competition and for projects involving mainly services.

On the other hand, DIFF grants are not available for projects where DIFF has previously provided assistance in the same sector of a recipient country. Grants are also not available for:

  • defence equipment or defence related projects
  • luxury goods
  • consumer durables; and
  • raw bulk commodities.

Interestingly, the new guidelines did not reduce the popularity of the DIFF scheme despite the fact that about 50 per cent of the proposed projects in the energy sector and 60 per cent of telecommunication projects seeking funding were found to be commercially viable, and therefore ineligible. In 1994-95, DIFF funds were oversubscribed by a factor of thirteen, with projects worth over $1.7 billion seeking DIFF grants worth $123 million. The 1995-96 figure was over $2 billion.

As a result of the changes, the main focus of DIFF funding over the past few years has been on infrastructure projects such as education, water supply and treatment, waste disposal, transport, and rural telecommunications and power. In the 1994-95 budget the Government introduced a new Green DIFF initiative to 'provide expanded opportunities for Australian business to supply developmentally important goods and services with an environmental focus to developing countries'. The objective of the Green DIFF is to transfer 'environmentally friendly technology and the provision of vital environmental infrastructure...'(7) This initiative could perhaps be viewed as a response to an earlier recommendation by the ACFOA, a critic of the DIFF program, to phase out the DIFF component of aid and establish a Green Technology Transfer Fund (GTTF).(8)

It can be argued that the early years of the DIFF program were thus not just an exercise in helping Australian industry find new export markets; DIFF funds were used to develop the export capability of a select few Australian manufacturers. For example, of a total of some $118.5 million in DIFF grants provided between 1982-83 and 1988-89, almost all were for projects in Indonesia and China. During this period, one company alone, Transfield Construction, was provided with DIFF funds amounting to $64.6 million for the Steel Bridges Projects No I and II in Indonesia.(9) Transfield is also a company that did extremely well out of the scheme in its early years between 1984 and 1993 receiving $153.4 million in DIFF funds, or nearly 30 per cent of all DIFF expenditure during this period (see Appendix). By 1991-92 as well, DIFF expenditure in Indonesia exceeded project aid expenditure and in 1992-93 it was about $50 million. Over the period 1982-83 to 1992-93, about 46 per cent of total DIFF expenditure was in Indonesia.(10)

These apparent distortions or imbalances contributed to the questioning of DIFF as 'good aid'. While that questioning often neglected to take account of both the enormous developmental needs of Indonesia and China and their significance to Australia in the region, AusAID's own review has questioned the viability and developmental relevance of the early programs (especially in Indonesia): 'concerns were expressed both about the lack of scrutiny applied to DIFF proposals and the developmental effectiveness of some of the activities supported.'(11)

These criticisms were more valid for the first few years after its inception when projects in sectors such as manufacturing and mining absorbed a considerable amount of DIFF outlay. Also, as AusAID has argued in its Review,(12) it was not until 1992 that the effect of the changes made in 1989 became obvious. The reason for the delay was a substantial backlog of projects which had been approved under the old guidelines, an indication of the popularity of the scheme among Australian businesses during a period when oversight was lax and there was little competition for available funds.

As DIFF has developed, however, with a tightening of the rules and greater scrutiny, the original objectives are more likely to be met.

The DIFF Debate

Throughout its life, the DIFF program has come under sustained criticism, especially from the NGOs. The linkages between aid and Australian business were seen as simply a subsidy for Australian business It was argued that mixed credit schemes distort development cooperation. Debate has also continued over whether DIFF is developmental or commercial by nature. Critics have argued interalia:(13)

  • DIFF diverts scarce aid resources to better off countries which have access to commercial funding. This is done at the expense of projects which would directly assist the poor and disadvantaged.
  • It is a trade promotion subsidy for Australian industry; that if this is the aim then the funds would be better used in other, more cost-effective trade and industry promotion programs.
  • DIFF distorts the domestic economy and has an adverse impact on exporters by creating a dependency effect

In defence of the DIFF program, it is maintained that:

  • The restrictions introduced under the Helsinki rules have effectively directed mixed credits towards projects and countries which have little or no access to market financing. Since these restrictions do not apply to countries recognised as 'least developed' by the UN, mixed credits are now more freely available to such recipients than to relatively more developed ones. In the Australian context, the two largest recipients of DIFF grants, Indonesia and China, are also, with the exception of PNG, the two largest recipients of bilateral aid. Also, sustainable development, the primary objective of Australia's aid, requires a long-term perspective rather than an attempt to meet the immediate needs of the poor. Hence, investments in areas such as water supply, sanitation and communication facilities can play a significant role in addressing the causes of poverty.
  • If DIFF were a trade subsidy, then other elements of the aid program could also be classified as such. Food aid would have to be considered to be a very inefficient subsidy as it is provided on a 100 per cent grant basis, compared to the 35 per cent AusAID contributes to DIFF project costs. The latter not only provides a mechanism for stretching the aid dollar but also encourages the involvement of the private sector in the Australian aid program.
  • With a DIFF expenditure of about $120 million or about 0.03 per cent of GNP, any distortion effects are likely to be rather small and, compared to exports, not measurable. A similar rationale applies to the dependency argument. DIFF is too small to have any significant effect on the industry sector.

Nature of DIFF Allocations

As funding for the DIFF scheme has grown rapidly over the past decade, it has developed into a well focused program. From $12.5 million in 1984-85, outlays on DIFF have grown to $130 million in 1994-95, about 8 per cent of the aid budget. As figure one shows, over this period, Indonesia and China have been the main recipients of DIFF grants, accounting for 46 per cent and 30 per cent of the expenditure respectively. The 9 per cent of total DIFF disbursements of $61.5 million to India are for the only DIFF related project in the country, the Piparwar Coal Mining project. These three countries thus account for 85 per cent of the total DIFF funding.

However, from the scheme's inception until June 1994, 90 projects with a total value of $643 million were undertaken in 15 countries. Another $123 million was committed on 13 projects during 1994-95.(14)

In terms of the sectoral allocation of DIFF grants, most of the funding has been to the transport (46 per cent) and communication (11 per cent) sectors.

Effectiveness of DIFF

A report on a review of the DIFF program carried out by AusAID, (A Review of the Effectiveness of the Development Import Finance Facility, January 1996) concluded that:

47 of the 51 projects surveyed had been effective in delivering the specific development benefits which had been intended. Overall, two-thirds of the project were rated as having delivered 75 per cent or more of their intended development benefits.(15)

The report also concluded that substantial benefits had been generated for Australia. Involving $285 million of AusAID funds, the 51 projects initiated between 1988 and 1993, generated $709 million expenditure on goods and services in Australia. Follow-on business directly related to these DIFF projects already realised by companies was estimated at $263 million and it was anticipated that another $397 million worth of follow-on business was likely to be achieved. Thus, excluding the follow-on business, it has been estimated that $1 of DIFF expenditure generated about $3.50 of business for Australia. Table three illustrates the direct commercial benefits from DIFF by country and region.

The highest rate of commercial returns from DIFF projects by table four includes the communication, manufacturing and agriculture sectors. However, it must be pointed out that several of the agricultural projects were in fact processing activities which could be classified as manufacturing.

Other benefits identified in the review include:

  • companies achieving economies of scale with repeat orders making them more competitive on a commercial basis for further work of a similar type. This is especially true in the field of high technology.
  • companies gained practical experience in working overseas and establishing contacts. For example, Transfield Construction changed from a company with less than 5 per cent of its total income derived from international activities in the mid-1980s to one where about 26 per cent of its income is now derived from its overseas operations. It won $4 million worth of bridge work in Laos without aid support. In China, Thailand and Taiwan it had, by the mid 1990s, won $100 million worth of business 'not involving Australian aid, but which was partially linked to the original AIDAB (as AusAID then was) support in Indonesia'.(16) Amongst the participating companies there also developed a greater awareness about overseas market opportunities, as is shown in table five.
  • a number of companies said that during the time the Australian economy was in recession (which included the period covered by the survey), they might not have remained viable. Some stated that they would have gone out of business. Westinghouse Brake and Signal, for example, reported that had it not been for the DIFF financed Rail Signalling project in Thailand in 1989, it would have been forced to substantially reduce its numbers.(17)
  • while it was difficult for the AusAID review team to arrive at an accurate assessment of the impact of DIFF-supported activities on employment, a conservative estimate of the employment generated by DIFF financed contracts and direct follow-on business, was of the order of 1500 staff years for the prime contractors only. This figure does not take into account employment generated through sub-contractors or for any multiplier effect. To cite Transfield's experience again, as a result of the Steel Bridges Project, it invested $15 million in its Seven Hills fabrication facility, which would otherwise have closed down, and created an extra 350 to 450 jobs. BHP which supplied the steel for the project, was estimated to have created about 500 extra jobs.(18)

According to AusAID, 'It is fair, therefore, to conclude that DIFF helped in a modest way to ameliorate the adverse employment effects of the recession.'(19)

Nonetheless, it is important to note that the review was based on an analysis of the DIFF scheme as it was (1988-89 to 1992-93), rather than it is today. In other words, the review covered projects approved before the revised Helsinki guidelines of the OECD took effect. Some of the projects would not be approved under current guidelines. This is especially true of the mining and manufacturing sectors. Public sector infrastructure projects in the water supply, sanitation and transport sectors, energy and telecommunication projects in remote areas would still be eligible.

When the cancellation of the DIFF scheme was announced, according to media estimates, there were about 52 projects with a combined value of around $1.2 billion in the pipeline. Australian companies are reported to have spent about $70 million on their development. They range from large firms like Transfield aiming for a $60 million contract to provide search and rescue vessels to the Philippines(20) to various high-tech small businesses aiming to enter the Asian market.

Internationally, it was expected that the revised Helsinki guidelines might lead to a reduction in mixed credit financing. This appears not to have been the case. Notifications of Helsinki type mixed credits rose from about $5.92 billion in 1993 to $7.14 billion in 1994. $4.2 billion of projects were notified in the first half of 1995.

The Cancellation of DIFF

Pending a review, the DIFF scheme was cancelled in April 1996. The scrapping of the scheme has also been the subject of criticism from various quarters, including some of the recipient countries

The former head of the Department of Foreign Affairs and Trade, Richard Woolcott, urged the Government to reverse its election commitment to abolish the DIFF because it contradicted the Government's larger commitment of making closer ties to the region a foreign policy priority. In a confidential letter to Andrew Thomson, the Parliamentary Secretary to the Foreign Minister, leaked to the Australian, he said:(21)

As things stand, Mr Howard's and Mr Downer's rhetoric about closer engagement with Asia has been eroded by this action and our credibility and reputation for reliability in the region will suffer, especially in the Philippines, following understandings reached during President Ramos's visit last August...

...I am sorry to have to write in these terms, especially as I have done my best to assist the new Government establish its credentials in Malaysia and in Indonesia and in a series of meetings with other ASEAN ambassadors in Canberra, but I believe this decision really will damage Australia's wider national interests in Asia.

Interestingly, given its earlier position, ACFOA issued a statement saying that the decision would 'send all the wrong signals to Asian neighbours and, in the end, act against Australia's national interest'.(22)

One of the largest recipient of DIFF-supported projects, China, also expressed concern about the decision to abolish the scheme. Some 19 projects worth about $140 million are said to be involved. The Chinese Ambassador to Australia, Hua Junduo said in a statement:(23)

Should those projects be scrapped off, it would not only cause financial losses on the Chinese side, but also do no good to the Australian side in terms of its credibility and business interests in China...

...We hope that the Australian Government will follow internationally accepted practices and continue to support the projects in the pipeline and implement these projects on time.

The Philippines Ambassador to Australia, Delia Domingo-Albert, was also critical of the decision to abolish DIFF. Appearing in the Nine Network's Nightline program, she said:(24)

It is a business transaction where there is a lot of competition, so if you are not in the market, then someone else will come in.

There will be a feeling in the region that Australia is not serious in promoting its capabilities in terms of its products in the market. Other countries support their companies in making an inroad into markets, and the DIFF scheme is definitely a way to help Australian companies into the market.

On 26 June, the Minister for Foreign Affairs, Alexander Downer informed Parliament that he had received written or oral representations at the ministerial level from Indonesia, China and the Philippines regarding the cancellation of DIFF.(25)

The Queensland Minister for Economic Development and Trade, Don Slack and the Victorian Premier, Jeff Kennett had also written to the Government about the adverse effects of this decision.(26)

Nonetheless the decision to abolish DIFF continues to be defended as one of those regrettable decisions required to bring the budget into surplus. The Minister for Foreign Affairs, Alexander Downer, replying to a question in Parliament on 17 June 1996 said:(27)

The fact is that if we did not abolish this program we would otherwise have to reduce spending on humanitarian programs within the aid budget...we were not prepared to do that. If we had to make a reduction in the aid budget, we were prepared to do that in the area of business subsidies.

A day later, on 18 June 1996, the Parliamentary Secretary to the Minister for Foreign Affairs, Andrew Thomson indicated that the cancellation of DIFF may not be permanent. Speaking during a debate on DIFF he said:(28)

....if there is room and if budgetary circumstances permit....down the track, in the financial year after next, we may be able to reintroduce a form of mixed credit scheme and resume some of the projects that were in the pipeline. If it was the case that after the election we had been left with a budget that was in a reasonable shape, I have no doubt that there would be no abolition of a scheme like DIFF.

Conclusion

The Development Import Finance Facility (DIFF), a mixed credit funding scheme, has had its share of controversy. Supporters maintain that it provides them with a level playing field in the growing markets of Asia where other countries have traditionally provided such funding to their exporters. Critics maintain that the scheme distorts aid priorities and is a trade promotion subsidy for Australian industry.

From its inception in the early 1980s to its demise in 1996, DIFF has been the subject of many reviews, revisions and changes in guidelines. The 1990s saw the program deliver what it was designed to do - development projects in recipient countries while helping Australian industry develop an export outlook.

It should perhaps be noted that aid, by definition as an operation in underdeveloped, overseas environments, is difficult. If it were not, it can be argued that the private sector rather than the government, would do it. Reviews of forms of aid have been an ongoing part of the international aid debate since aid became a significant aspect of international relations with the de-colonisation process that followed World War II and this will quite probably continue to be the case. DIFF has been no exception. But, as only 8 per cent of the total aid budget as at 1994-95, and moreover that part of the budget particularly encouraging the involvement of the private sector, it is paradoxical that it has been unilaterally rejected by a Coalition Government which has stated its intention to involve the private sector in its aid program.

While the DIFF scheme in its present incarnation appears to be dead, there may be a distinct possibility that the program could be revived. Sections of the Australian business community and other organisations involved in the aid program have strongly defended the scheme. Currently, a review of the aid program is being conducted by Paul Simons, former Executive Chairman of Woolworths. The report is due by the beginning of 1997. It is possible that the findings of this review might lead to the reincarnation of a mixed credit scheme in 1997-98.

Endnotes

  1. Meeting Our Commitments, Media Release, 15 February 1996.
  2. Financial Review, 12 May 1996.
  3. Australia's Overseas Aid Program 1995-96. Budget Related Paper No, 2, p. 15.
  4. Actionaid, The Reality of Aid 94, London, May 1994, p. 37.
  5. OECD, Development Assistance Committee Report 1995, Paris, 1996, p. 92.
  6. AIDAB, Development Import Finance Facility: Explanatory Brochure, Canberra, 1994.
  7. Australian Development Cooperation Program 1994-95, Budget Related Paper No. 2, p. 48.
  8. Australian Council for Overseas Aid, Aid For Change, May 1992, p. 91-92.
  9. AusAID, Commercial Benefits from Development Cooperation with Indonesia, Canberra, 1995, p. 136-137.
  10. ibid. p 27.
  11. ibid. p. 31.
  12. A Review of the Effectiveness of the Development Import Finance Facility, loc cit. p. 16.
  13. See for example Actionaid, The Reality of Aid 94, London, May 1994, p. 25, 37. 'Corporate Hijacking of Australian aid' AidWatch No. 6, June 1995, p. 8-9, Australian Council for Overseas Aid, Aid For Change, May 1992, p. 90-91.
  14. Minister for Development Cooperation, Media Release, 21 July 1995.
  15. A Review of the Effectiveness of the Development Import Finance Facility, op cit., p.7.
  16. Commercial Benefits from Development Cooperation with Indonesia, op.cit., p.137.
  17. Vivienne Filling, 'The Role of DIFF in Industry Strategies' in AIDAB, Development with a DIFFerence, 1993, p.102.
  18. AIDAB, Focus, June 1992, p.26.
  19. A Review of the Effectiveness of the Development Import Finance Facility, op cit.,p. 37
  20. Financial Review, 15 May 1996.
  21. 14 June 1996.
  22. News Fax 16 May 1996.
  23. Financial Review, 17 May 1996.
  24. ibid.
  25. Current House Hansard, 26 June 1996, p. 2777.
  26. Financial Review, 17 May 1996, also 6 June 1996.
  27. Current House Hansard, 17 June 1996, p.1956.
  28. Current House Hansard, 18 June 1996, p.2076.

Appendix

Top 10 Development Import Finance Facility Contractors 1984-85 To 1994-95

----------------------------------------------------------------------------
Company and Project                                          DIFF Grant ($m)
----------------------------------------------------------------------------

Transfield Construction Pty Ltd
     Steel Bridges Project I (Indonesia)                                21.7
     Steel Bridges Project II                                           42.9
     Steel Bridges Project III                                          67.6
     Steel Bridges Project IV                                           10.1
     Sarawak Transmission Grid (Malaysia)                               11.1
     Total                                                             153.4

Westinghouse Brake and Signal Co
     Cirebon-Kroya-Jogjakarta Rail Signal Project (Indonesia)           40.4
     Tasikmalaya-Kroya Rail Signal Project (Indonesia)                  24.5
     Rail Signalling Equipment (Thailand)                               18.4
     Total                                                              83.3

White Industries Ltd
     Piparwar Coal Mining Project (India)                               61.5
     Total                                                              61.5

GEC Alsthom Australia Ltd
     Jakarta Electricity Substations (Indonesia)                        24.3
     Bekasi-Bandung Railway Signal Project (Indonesia)                  27.5
     Penang Port Commission Project (Malaysia)                           9.3
     Total                                                              61.1

Olex Ltd
     Xian-Chendu-Zengshou Telecommunications Project (China)            10.6
     Lanxin Rail Communications Project (China)                          7.3
     Lanzhow-Urumqi Telecommunications Project (China)                    25
     Outer Islands Telecom Project (Cook Islands)                        0.1
     Total                                                                43

Energy Equipment PtyLtd/CMPS & F
     Henan Coal Gasification Project (China)                            29.9
     Luoyang Mining Machinery Plant (China)                              2.6
     Total                                                              32.5

John Holland Construction Pty Ltd
     Main Line South Railway Upgrade Project (Philippines)              18.1
     Aircraft Hangar Complex (Bangladesh)                               11.5
     Total                                                              29.6

Alcatel Australia
     Gansu, Ningxia, Tibet Rural Telecommunications Project (           21.2
     Qinghai Telecommunications Project (China)                          5.1
     Digital Telephone Exchanges (PNG)                                   1.4
     Total                                                              27.7

ABB/EPT Pty Ltd
     Jakarta Powerline Upgrade (Indonesia)                              20.1
     Total                                                              20.1

Kirby Engineering Pty Ltd
     Refrigerator Compressor Plant (China)                              16.4
     Vehicle Body Plastic Tooling (China)                                  3
     Total                                                              17.6
----------------------------------------------------------------------------

Note: While facts on the recipients of DIFF grants are available in AusAID 
publications, the dispersed nature of the information meant that this table 
had to be compiled from various sources.

Sources: AusAID, Commercial Benefits from Development Cooperation with Indonesia, 
           Canberra, 1995.
         AusAID, Business Participation in AusAID's Aid Programs 1994-95, 
           August 1995.
         AIDAB, Business Participation in AIDAB's Aid Programs 1993-94, 
           September 1994.
 
 

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