Spain set to approve Chinese car plant despite alleged security concerns

MADRID, Aug 11 (Reuters) - Spain's Defence Ministry will approve state-owned Chinese carmaker SAIC's plans to build a car factory in the Galicia region, a ministry spokesperson said on Tuesday, despite reports of potential security risks associated with the project's proximity to a naval base.

SAIC is one of a growing number of Chinese car and battery makers signing deals to set up plants in Spain, in some cases providing a lifeline for regions where car factories had shut down.

The plant, which will build up to 120,000 cars a year for the MG brand, is due to begin construction in 2027 and become operational from 2028.

Spanish newspapers El Mundo and El Pais reported on Monday, however, that Spanish intelligence services had warned in internal reports of the risk of espionage from the plant to be built 5 kilometres (3.1 miles) from Ferrol, a key port for the Spanish navy and a maintenance point for F-100 frigates participating in NATO missions.

Officials were concerned that the Chinese company could obtain sensitive information about the navy's daily movements, the newspapers cited unnamed military sources as saying.

Asked about the reports, a spokesperson for the Galician regional government said that Spain's Defence Minister Margarita Robles on Tuesday contacted Galicia's regional chief to assure him that she would support the project when it was submitted to cabinet for approval. 

The Defence Ministry has been involved in negotiations with SAIC for months and has expressed "no concern regarding security", the Galician government spokesperson said.

A defence ministry spokesperson confirmed that stance to Reuters and said the project would be subject to approval by a Strategic Investments Committee that may attach conditions on topics like security. The spokesperson would not say what, if any, conditions the ministry would call for.

(Reporting by Victoria Waldersee, editing by Andrei Khalip and Susan Fenton)