Thu, Jul 31, 2003 - Page 10 News List

Britain's Tony Blair lobbies for Rolls-Royce by proxy

By Bill Heaney  /  STAFF REPORTER

British Prime Minister Tony Blair has contacted Taiwan's government to lobby on behalf of Rolls-Royce Ltd which is bidding for a contract to supply the nation's state-owned carrier China Airlines Co (華航) with aircraft engines worth NT$27 billion, sources said yesterday.

"Derek Marsh, director general of the British Trade and Cultural Office, delivered a message of support for Rolls-Royce from Tony Blair to the Taiwanese authorities [on Tuesday]," an official at the UK's de facto embassy in Taipei who asked not to be named confirmed yesterday.

Chinese-language media speculated yesterday that Blair's office has offered to arrange an official trip to the UK for President Chen Shui-bian's (陳水扁) wife Wu Shu-chen (吳淑珍) in exchange for the deal. Presidential Office spokesman Huang Chih-fang (黃志芳) dismissed the speculation yesterday.

"There has been some speculation about China Airlines' purchase of jet engines, but that is an affair for the company," he said. He did not confirm if Chen had received Blair's letter.

China Airlines has not yet chosen the contractor to supply engines for 22 new aircraft it ordered towards the end of last year. The first plane was delivered to the carrier last week.

The UK's Rolls-Royce is competing against US-based GE Aircraft Engines -- a division of General Electric Co -- and United Technologies Corp unit Pratt & Whitney for the contract.

"The contract is still under discussion and no decision has been made yet," China Airlines' spokesman Roger Han (韓梁中) said yesterday.

The UK has been lobbying hard for the China Airlines contract, sending two trade ministers -- Alan Johnson and Nigel Griffiths -- to Taiwan in April this year to talk with government officials. Local business leaders said at the time that two high-level visits in the same month was a first. If the contract goes to Rolls-Royce, it will mean valuable jobs for the UK's shrinking manufacturing sector.

Taiwan's exports to UK

* Machinery and transport equipment: NT$86.9 billion

* Chemicals and related products: NT$27.0 billion

* Beverages and tobacco: Not applicable

* Food and live animals: Not applicable

* Miscellaneous manufactured articles: NT$25.8 billion

* Manufactured goods classified by material: NT$20.8 billion

* Crude materials, inedible, except fuels: NT$13.6 billion

* Total UK imports from Taiwan: NT$138.6 billion

Source: HM Customs & Excise; DTI/ES Statistics


Prime Minister Blair's letter comes after a second project that British companies were competing for went to Chinese Petroleum Corp (中油) on July 4. British Petroleum and Royal Dutch Shell Group failed to grab the NT$600 billion contract to supply 1.7 million tonnes of natural gas annually to state utility Taiwan Power Co (台電) starting in 2008.

Both contracts have caused controversy in Taiwan which sees the US as a close ally in its struggle against China. When China Airlines announced last year that it intended to buy all 22 aircraft from Airbus, legislators argued that Boeing should get the order instead. The airline caved in to pressure and split the order between the two, taking 12 from Airbus and 10 from Boeing.

Some analysts are worried that China Airlines will now split the engine order between the British and the Americans.

"It doesn't make sense to split the order," said one Hong Kong-based airline industry analyst who spoke on condition of anonymity. "For maintenance reasons it makes sense to go for one supplier."

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