Oil rig scheme 'wasted pounds 30m'

THE Export Credits Guarantee Department has been criticised by the Commons Public Accounts Committee for squandering up to pounds 30m of taxpayers' money on a scheme to purchase two oil rigs in Scotland, writes Chris Blackhurst.

The rigs were bought in 1980 by Permargo, a Mexican company, with bank loans backed by the ECGD. But before the rigs were delivered the contracts were cancelled and Permargo defaulted on its loans.

Instead of selling the rigs, ECGD tried to refinance the project. When that failed, in February 1993 ECGD repossessed the rigs. It hopes to recoup between pounds 12m and pounds 20m from their sale, leaving a net loss of pounds 20m to pounds 30m.