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Pergau Dam : Corruption Case

In March 1994, it was reported that Biwater was one of the five firms who benefited most from the scheme of aid financing which was at the centre of the Pergau dam affair over which Malaysia banned British firms from bidding for contracts.

When Thatcher arrived in Malaysia in 1985, work had already begun on a large and ambitious aid project, to provide clean water in rural parts of the country. The scheme was estimated to cost Pounds 194million. Discussions were taking place between the Malaysians and Biwater, a Surrey-based company with expertise necessary to complete the enormous project. Like many other engineering firms, Biwater was no stranger to the foreign aid system. It was also a modest contributor to Conservative party funds. The proposed Biwater project immediately became a bargaining counter in the game of international diplomacy, according to participants in the talks.

When she emerged from the meeting, Thatcher told waiting delegations that aid would be offered for Biwater's scheme. 'It was so impressive,' said one former Malaysian minister. 'Mrs Thatcher did all the talking. She stood up and offered aid to build the rural water supply project. It was to be built by Biwater, a British firm. We could have done it ourselves, but the money was offered - and we accepted.'

That offer for Pounds 59m was then the largest amount of British aid ever awarded under the Aid and Trade Provision (ATP), the category of aid money reserved for direct subsidies to British firms.

The following lists all references contained in our database that are relevant to this briefing
The Sunday Times FT [3/13/1994] 'When aid can backfire in the donor's face. The Malaysian Affair.' by JONATHAN CLAVERT and RANDEEP RAMESH [Source ID = 2382]

THE OBSERVER [2/27/1994] 'HOW BRITAIN WON AND LOST AN ASIAN TRADING EMPIRE' by Dean Nelson and M G Pillai in Kuala Lumpur, and Michael Durham in London [Source ID = 5759]

FT Energy Newsletters - Power Asia [4/7/1994] 'The Pergau loan: When aid becomes a bribe' [Source ID = 8236]


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