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Tuesday, 5 May 1987
Page: 2295

Senator ELSTOB —My question is directed to the Minister for Finance and refers to the latest criticism of the administration of the Asian Development Bank, as reported in the Australian Financial Review of 21 April. Is the Minister of the opinion that the allegations contained in the article have some veracity, and that the particular livestock contract with Indonesia has been unreasonably delayed? Is the Minister satisfied that Australia's continued contribution to the ADB is an effective and proper allocation of our aid budget?

Senator WALSH —Australia's executive director of the bank has sought comments from it and the Australian representative in Manila on several points raised in the article referred to by Senator Elstob. I will try to get those comments for Senator Elstob when they come in. In the meantime I draw his attention to the bank's reply published in the Financial Review on 30 April to the effect that there were good reasons for the delay in the awarding of the contract. Firstly, the bank stated that it could not proceed with processing tenders for the second Kalimantan livestock project because the Indonesian authorities had given it only the names of the local counterpart firms when it also needed to know the country of origin and sources of supply of the capital and other particulars. Secondly, a bank mission visiting Indonesia in early 1987 reported the high mortality rate among newly imported cattle. As a result, the mission recommended that either quarantine arrangements be improved to reduce the high mortality or further procurement of imported cattle under all ongoing bank finance projects be held in abeyance. Subsequently the bank agreed to process the procurement papers for the second Kalimantan project on condition, firstly, that the receipt of bid documents verified the source and origin of the cattle and the particulars of foreign suppliers; secondly, that the Indonesian authorities undertook to strengthen quarantine facilities before awarding the contract to the lowest evaluated bidder; and, thirdly, that the successful bidders provided superior transportation, shipping, quarantine, feeding and management of their cattle. The bank states that, if the Indonesian authorities provide these assurances and information, its procurement committee will resume processing the procurement request. Australia recognises that some questions have been raised about the project quality of the bank and is working within the bank along with other members to improve that situation.