EU not withholding cash: Chaudhry
Tuesday August 21, 2007

Fiji's interim Finance and Sugar Minister Mahendra Chaudhry says there was never a commitment between the interim administration and the European Union for a Financing Agreement for the ailing sugar industry for 2007.

This follows media reports that Fiji will not receive EU money for the industry this year unless credible steps are taken towards democracy.

In a statement today, Chaudhry said that there was no intention from the interim Government or from the EU to sign a Financing Agreement in 2007, "as funding from the 2006 Financing Agreement were earmarked to be released in 2007".

"Contrary to this, the Fiji Government expects the funds under the 2006 Financing Agreement to be disbursed in 2007/2008, following the formalization of the Grant Contract Agreements for sugar cane replanting and research and extension services," he said.

Chaudhry said both parties have mutually agreed, following extensive consultations in Brussels earlier this year, that release of funding assistance under the Accompanying Measures Programme in years 2009 and 2010, would be dependent on the remaining commitments from the Fiji Government being successfully achieved.

Chaudhry said that this would also include the holding of democratic elections in 2009.

Chaudhry said that according to the 2006 Financing Agreement funds, "under the Accompanying Measures Programme", ?2.096 million will be given to finance the cane replanting, seed and land preparation programme;?1.342 million to finance the research and extension programme; and ?440,000 to establish and finance a Project Management Unit to conclude contracts, manage contracts, and supervise works on behalf of the Government of Fiji.

He said the interim administration and the EU signed the 2006 Financing Agreements "on 19th June 2007, following Government of Fiji's adherence to the first commitment by lifting the Emergency Decree".

He further added that the signing of the 2006 Financing Agreement, allows ?4.038 million to be released to finance the three key areas of the sugar industry.

Chaudhry said the schedule of financing under the Accompanying Measures Programme, as initially agreed with the EU, would be as follows:

- The ?4.096 million under the 2006 Financing Agreement for cane replanting, research and extension services, and project management unit, which will be disbursed in 2007 and 2008.

- ?8 million under the 2008 Financing Agreement.

- ?24 million is expected to be disbursed in 2009; and

- ?28 million is expected to be disbursed in 2010.

The EU has officially said that they have not issued any statements "on the future of its development assistance programme to Fiji".