US DELAYS DRUG PLAN IN COLOMBIA

WASHINGTON (AP) - The State Department will delay plans to expand its fleet
of drug spraying planes in Colombia after the planes' bankrupt manufacturer
shut down its assembly lines this month.

Ayres Corp. of Albany, Ga., had won the contract without having to compete
for it, despite a rival's claim that Ayres' shaky finances made it
undependable.

The delay is a setback to the $1.3 billion, U.S.-funded plan to step up
drug eradication in Colombia. Since the mid-1990s, State Department
contractors have worked with Colombian police in fumigating coca and opium
crops, the raw materials for cocaine and heroin.

Ayres halted production Aug. 3, just five days before it was due to deliver
the first of nine single-engine, propeller-driven T-65 planes.

Those planes, along with three twin-engine OV-10 planes that the State
Department is refurbishing, would have increased the 11-plane fleet to 23
planes by February.

The additional planes are "extremely important because we're trying to go
after an exploding amount of coca production and opium production," said
Barry McCaffrey, the former White House drug policy director.

"You want to have a mass of spray aircraft that you can move around the
country and attack these criminal operations all in one fell swoop and then
move somewhere else," he said.

The State Department declined to provide specifics on the shutdown's
effect. "We will not be able to increase our support of the Colombian
National Police's aerial eradication program as quickly as we had
originally envisioned," the department said in a statement in response to
an inquiry by The Associated Press.

Congress provided $20 million for the Ayres planes and the refurbished
OV-10s. Fred Ayres, the president of the plane company, said Ayres' share
of that was about $15 million.

Ayres' main creditor, GATX Capital Corp. of San Francisco, has taken over
the company's assets and hopes to find a buyer soon, GATX spokesman Glenn
L. Hickerson said. If it does, the first planes could be completed by
year's end, he said.

It was not clear if the State Department would wait for the sale. The
department said it is exploring its legal options and examining ways to get
planes soon.

An Ayres rival, Air Tractor Inc. of Olney, Texas, planned to demonstrate a
spray plane to State Department officials this week, said the company's
president, Leland Snow.

In January, Air Tractor cited Ayres' finances when it challenged the State
Department's decision to award the contract without allowing competitors to
bid.

"Ayres is neither technically nor financially qualified to perform this
contract," Air Tractor said in documents submitted to the General
Accounting Office. "Its production line is shut down for a lack of a work
force and lack of operating capital."

Air Tractor also claimed it could build a better plane for drug spraying
missions and that the contract should have been open to competitive bidding.

The GAO rejected the protest in April, saying it was filed too late.

In a Sept. 7 document explaining why bids were not sought, Assistant
Secretary of State Rand Beers said the Colombian National Police had been
using Ayres planes since the early 1980s and was used to flying and
maintaining them.

Fred Ayres said the Colombian government "specifically requested our
airplanes."

"They didn't want to have a mix of different types of airplanes," he said.
"They didn't want to have to retrain pilots or retrain mechanics."

Ayres' financial collapse stemmed from problems with subcontractors on an
unrelated contract, Ayres said. The difficulties began about two years ago
but "didn't seem insurmountable" until August 2000, Ayres said.

Ayres' company filed for Chapter 11 bankruptcy protection in November. The
State Department contract was signed a month or two later, he said.

For months afterward, State Department officials told members of Congress
they expected the planes to be delivered on time. As recently as July 11,
Beers told a Senate panel that the first Ayres plane "should be delivered
in August."

U.S. officials have advocated spraying as the best way of eliminating coca
from fields that are often defended by leftist guerrillas who partially
finance their insurgency by protecting traffickers.

Opponents say the spraying damages legal crops, threatens the environment
and causes health problems - criticism rejected by the State Department.