FIRMS are to lose out on subcontract work on a £60 million airport project on the Caribbean island of Dominica because the UK government has withdrawn its backing.
Anglo-Egyptian firm AIC received a letter of intent for the job from the island's government early this year and asked the Export Credits Guarantee Department (ECGD) to provide £10 million-worth of cover.
Under government finance rules, if the ECGD backs a scheme, most of the subcontract work must go to UK firms.
Paul Woodman, AIC's business development manager, said: 'It is a bizarre decision to turn down a contract of £60 million when we only asked for cover of £10 million.
'They had cover available but decided the project wasn't right. This is typical of ECGD at the moment, they are risk-averse and are tying people's hands behind their backs.'
The deal is now expected to go to a nonUK firm that does have backing or it could be re-tendered. Swedish giant Skanska is understood to have already sent an envoy to the island, which is a member of the Commonwealth, to try to snatch the deal from under AIC's nose.
An ECGD spokesman responded: 'We have a duty to balance the interests of the taxpayers with those of the exporter and were concerned about the viability of the financing proposal put to us by AIC.'
The Dominica deal was landed by the international arm of Fitzpatrick, which was subsequently taken over in June by AIC for £1.5 million. However, AICEurope still operates out of Fitzpatrick's Kent base and remains UK registered.
An ECGD spokesman denied its rejection of the scheme was related to the takeover by AIC, which is planning to float on the London stock market next year.
The island's government has already spent £3.5 million on buying the proposed airport's site and is currently prequalif ying contractors for an infrastructure package to cater for it.
It also needs to find £6.2 million to resettle farmers displaced by the scheme and a further £12.5 million for access roads.