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6 Mar 2003 : Column 1159W—continued


Mr. Tyler: To ask the Secretary of State for Defence what training and guidance is being given to British troops and hygiene units on the use of organophosphate pesticides in any potential conflict with Iraq; and if he will make a statement. [94733]

Dr. Moonie [holding answer 3 February 2003]: Guidance on the safe and effective use of pesticides, including organophosphate insecticides, is provided in the Joint Services Manual on Pest Control. This covers safety requirements including the use of protective equipment, and states that insecticides may only be used

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by appropriately trained personnel. Environmental health briefs are issued to British forces deploying to the Gulf region as part of routine preparations.

Peacekeeping Duties

Mr. Drew: To ask the Secretary of State for Defence how many British personnel are on peacekeeping duties, broken down by (a) regiment and (b) location. [101170]

Mr. Ingram: There are presently some 3,400 British personnel deployed on peacekeeping operations throughout the world; some 500 are deployed to six UN operations, around 2,600 are deployed in support of NATO operations in the Balkans, and approximately 300 are deployed to Kabul as part of the International Security and Assistance Force (ISAF).

The core of the United Kingdom's contribution to the UN Force in Cyprus (UNFICYP) is provided by elements from 47th Regiment Royal Artillery. The United Kingdom's commitment to the Balkans includes a Battalion in Bosnia and Herzegovina, currently 1st Battalion The Royal Scots, and a Battalion in Kosovo, currently 1st Battalion The Staffordshire Regiment. The 21st Engineer Regiment provides a Squadron in Bosnia and 26th Engineer Regiment provides a Squadron in Kosovo. In Afghanistan, a Company from 2nd Battalion The Royal Anglian Regiment will shortly provide the key United Kingdom contribution to ISAF.

The bulk of Service personnel on peacekeeping duties are not deployed as part of formed regiments. They fulfil a variety of command, specialised and supporting roles, such as engineering, communications and logistics for formed national and multi-national headquarters.

Mr. Drew: To ask the Secretary of State for Defence what plans he has to change the number of personnel on peacekeeping operations in (a) Bosnia, (b) Kosovo, (c) Sierra Leone and (d) Afghanistan. [101171]

Mr. Ingram: In Bosnia and Kosovo we intend to reduce by the spring to the levels my right hon. Friend the Secretary of State for Defence announced in September last year. In keeping with the reductions in SFOR (Bosnia) and KFOR (Kosovo) planned as part of NATO's review of peacekeeping operations, the United Kingdom is reducing its forces from some 4,350 troops in September last year to some 2,500 by the spring of this—some 1,500 in Bosnia and 900 in Kosovo.

The UK provides 21 UK personnel to the UN Mission in Sierra Leone (UNAMSIL), which is responsible for providing assistance to the Government of Sierra Leone in order to maintain law, order, peace and stability throughout the country. There are currently around 14,000 troops in UNAMSIL, which is expected to draw down by mid-2004.

There are currently no plans to reduce the number of personnel in Afghanistan.


Mr. Gerald Howarth: To ask the Secretary of State for Defence whether the £200 million to be received from the first stage of the PPP involving QinetiQ is net of the estimated £80 million restructuring costs; how much more he estimates the MOD will receive from the sale of QinetiQ (a) as a gross figure and (b) net of costs;

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whether the £80 million costs incurred is an increase on his Department's initial estimate for the PPP; and if he will make a statement. [99598]

Dr. Moonie: The £200 million to be received from the sale of a stake in QinetiQ to The Carlyle Group is a gross figure. Of the approximately £80 million costs of the PPP process, around £58 million were incurred by either the DERA Trading Fund or by QinetiQ plc. The impact of these costs is shown in QinetiQ's accounts and would have been taken into consideration by the purchaser when valuing the company. The £200 million receipt from the initial transaction therefore already includes any adjustment resulting from these costs. The remaining £19 million costs incurred directly by the Ministry of Defence (in addition to some £3 million borne by the Dstl trading fund) should be deducted from the £200 million receipt in order to determine MOD's net proceeds from the transaction so far. It would however be misleading to view these costs solely in the context of the initial receipt as a significant proportion of them relate to the formation of QinetiQ as a separate commercial entity and consequently they need to be assessed against the total receipts from all stages of the PPP process.

Any attempt to produce a precise estimate of likely proceeds or costs arising from the future sale of our remaining stake in QinetiQ would be purely speculative at this stage. The size of receipt is likely to be hundreds of millions of pounds, but will depend on the commercial success of the company as well as market conditions at the time of transaction. Although we anticipate that the sale will take place by means of a flotation in around three to five years, the final choice of timing and transaction will depend on value for money considerations. This choice will have an influence on the costs which are incurred.

The total cost of £80 million is in line with the estimate given to the HCDC in May 2001. This estimate included an approximate expected cost of some £6.5 million for consultancy advice to MOD on the whole DERA PPP, but we now expect the final total for this element of the costs to be around £17 million. A significant proportion of this increase results from additional work necessary to respond to difficult market conditions. This included the need to keep open both the options of a flotation as well as a strategic partnership. Extra work was also carried out to analyse and apportion liabilities following loss of capacity in the insurance markets after the events of 11 September 2001.

Mr. Gerald Howarth: To ask the Secretary of State for Defence pursuant to his answer of 15 January, Official Report, column 687W, on QinetiQ, when he expects his Department to receive payment of the £100 million outstanding. [99599]

Dr. Moonie: When QinetiQ was created as a plc it purchased assets from the Ministry of Defence with a combination of shares and an obligation in the form of an interest bearing loan note to pay a further £150 million to the MOD. QinetiQ paid £50 million principal plus accrued interest in February 2002.

As part of the transaction with The Carlyle Group, a further £50 million of the loan notes will be repaid before the end of this financial year (2002–03). The

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remaining £50 million is secured against property at Chertsey and will be repaid to the MOD as payments are received from the sale. The detailed timings of these payments are still the subject of commercial negotiations with potential purchasers.

Mr. Gerald Howarth: To ask the Secretary of State for Defence what the estimated market value of QinetiQ is; and what the value of the company was on 1July 2001. [99602]

Dr. Moonie: Carlyle placed an overall enterprise value on the company of £500 million following a competitive sale process. The £500 million was based on the futurecash-flows of the business and did not take into account liabilities, other obligations or outstanding debt. The liabilities, other obligations and outstanding debt were £375 million leaving an equity value for the business of £125 million.

When QinetiQ was vested as a plc in July 2001 it was required to purchase its assets from the Ministry of Defence. At this point there was no means to establish the market value of the business, and the price paid for the assets was based on the net book value of £495 million shown in QinetiQ's accounts. It is important to note that this figure does not reflect the value of QinetiQ as an ongoing business nor, given the very specialised nature of many of QinetiQ's assets, does it reflect their potential sale value on the open market.

Mr. Gerald Howarth: To ask the Secretary of State for Defence if he will publish the most recent pro forma accounts for QinetiQ. [99603]

Dr. Moonie: QinetiQ was formed as a public limited company on 1 July 2001. In accordance with the Companies Act 1985 publication of accounts is the responsibility of the plc's management. The next full year accounting period end for QinetiQ is 31 March 2003 and QinetiQ's management will be required to publish these results within the timescales laid down in the Companies Act 1985. The Ministry of Defence cannot independently publish pro forma accounts for the plc.

RAF (Overflight Rights)

Harry Cohen: To ask the Secretary of State for Defence which countries have refused the UK's armed forces overfly rights in the last three months; and what reasons were provided in each case. [100150]

Mr. Ingram: There are currently no countries that have refused to grant the United Kingdom armed forces overflight rights. Diplomatic clearance is sought, through normal channels, on an individual basis for each flight.

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