Billions in overseas contracts could be affected by change in commercial policy of state export insurer.
The industry has voiced growing concerns about an upcoming review of the government’s export credit agency that could lose contractors billions in overseas contracts.

Taylor Woodrow chief executive Bruce Russell, who is chair of the Export Group for Constructional Industries, last week met the head of British Trade International, a Foreign Office/Department of Trade and Industry agency, to lobby against any change in the Export Credit Guarantee Department’s remit.

The ECGD underwrites £3bn worth of goods and services exported by UK companies, and offers protection to contractors that undertake foreign projects with a high risk of non-payment.

The ECGD has traditionally assessed exports solely on commercial grounds, but this may be about to change. A consultation document released this month as part of a five-yearly departmental review has called for suggestions as to how the agency can be brought into line with the government’s public commitment to an ethical, environment-friendly foreign policy.

The Export Group for Construction Industries is now lobbying to prevent such a shift, which it believes could lead to the ECGD refusing to underwrite certain types of contracts.

Russell described his meeting with Sir David Wright of British Trade International as “very helpful”. He said: “The ECGD is extremely valuable to British construction exporters and we think it operates very well as it is currently formulated. We are concerned with its development because the guarantee it gives is a very important support for our members.”

The Association of Consulting Engineers also plans to respond to the consultation paper. Chief executive Nicholas Bennett said: “At the moment, the ECGD’s rules are pretty clear-cut and judgements are made on commercial grounds. It concerns us that we will be told it is politically incorrect to do x, y, and z.”

The ECGD has traditionally been unpopular with the environmental and human rights lobbies. Balfour Beatty has recently come under the spotlight over a £200m contract to build a dam in Turkey; in view of its environmental consequences, Friends of the Earth says the government should have refused to underwrite this project.

The deadline for the return of consultation papers is 15 October.

A copy of the consultation paper is available from the ECGD on 0171-512 7275.