Major approved pounds 234m aid for 'wasteful' dam project

THE PRIME Minister took the final decision to overrule his own officials and pump pounds 234m of British aid into a

Malaysian dam project described by the Overseas Development Administration as 'a very bad buy'.

Until yesterday and the appearance before the Commons Public Accounts Committee of Sir Tim Lankester, the former ODA permanent secretary, it was widely assumed the green light for Britain's funding of the Pergau hydro-electric project came from Douglas Hurd, the Foreign Secretary.

Not so, said Sir Tim, pushing John Major, who spent yesterday giving evidence to the Scott inquiry less than a mile away, into further difficulty.

In a report in October, the National Audit Office, the public spending watchdog, condemned Pergau as uneconomic, environmentally unsound and a waste of taxpayers' money. The office pointed the finger at Mr Hurd, saying he ordered Sir Tim to spend the money - on 4 July 1991.

But under repeated questioning from MPs, Sir Tim said the decision was actually taken in Cabinet on 26 February 1991. He said that Mr Major was confirming an oral undertaking given by Margaret Thatcher personally in 1989.

Sir Tim, now Permanent Secretary at the Department for Education, also admitted for the first time that aid for Pergau was linked to a pounds 1.3bn sale of arms to Malaysia - something the Government has consistently denied.

His admission came the day after Lord Younger, then Secretary of State for Defence, told the Independent he had always assumed that to be the case.

After reading out a statement from Mr Hurd, in which the Foreign Secretary claimed increases in exports to Malaysia justified the expenditure, Sir Tim agreed he took that to include defence sales. 'Clearly there was a perception of linkage,' he said. Sir Tim's opposition to Pergau was contained in a memorandum for Mr Hurd. The Government drew accusations of a cover-up by refusing to release the document.

The initiative for British involvement in Pergau came from the Department of Trade and Industry, with the building work awarded to Cementation International and Balfour Beatty. Cementation is owned by Trafalgar House, which donated pounds 590,000 to the Tory party from 1979 to 1992.

A cheaper alternative gas turbine power station to be built by another company was rejected.

Tom Clarke, shadow Minister of State for Overseas Aid, said afterwards it was 'very serious, with the present Prime Minister agreeing to use our limited aid reserves in this way'. Mr Major's decision, claimed Mr Clarke, 'benefitted a small number of people closely associated with the Tory party'.

Frenetic days, page 2

Suggested Topics
Start your day with The Independent, sign up for daily news emails
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs General

Recruitment Genius: Sales Administrator

Negotiable: Recruitment Genius: This caravan dealership are currently recruiti...

Recruitment Genius: Invoicing Clerk

£14500 - £17500 per annum: Recruitment Genius: This company are contractors to...

Recruitment Genius: Executive Administrator / Marketing Assistant

£20000 - £25000 per annum: Recruitment Genius: This leading supplier of packag...

Recruitment Genius: Trainee Field Sales - OTE £30,000

£18000 per annum: Recruitment Genius: This company is a rapidly expanding offi...

Day In a Page

Greece debt crisis: What happened to democracy when it’s a case of 'Vote Yes or else'?

'The economic collapse has happened. What is at risk now is democracy...'

If it doesn’t work in Europe, how is it supposed to work in India or the Middle East, asks Robert Fisk
The science of swearing: What lies behind the use of four-letter words?

The science of swearing

What lies behind the use of four-letter words?
The Real Stories of Migrant Britain: Clive fled from Zimbabwe - now it won't have him back

The Real Stories of Migrant Britain

Clive fled from Zimbabwe - now it won’t have him back
Africa on the menu: Three foodie friends want to popularise dishes from the continent

Africa on the menu

Three foodie friends want to popularise dishes from the hot new continent
Donna Karan is stepping down after 30 years - so who will fill the DKNY creator's boots?

Who will fill Donna Karan's boots?

The designer is stepping down as Chief Designer of DKNY after 30 years. Alexander Fury looks back at the career of 'America's Chanel'
10 best statement lightbulbs

10 best statement lightbulbs

Dare to bare with some out-of-the-ordinary illumination
Wimbledon 2015: Heather Watson - 'I had Serena's poster on my wall – now I'm playing her'

Heather Watson: 'I had Serena's poster on my wall – now I'm playing her'

Briton pumped up for dream meeting with world No 1
Wimbledon 2015: Nick Bollettieri - It's time for big John Isner to produce the goods to go with his thumping serve

Nick Bollettieri's Wimbledon Files

It's time for big John Isner to produce the goods to go with his thumping serve
Dustin Brown: Who is the tennis player who knocked Rafael Nadal out of Wimbeldon 2015?

Dustin Brown

Who is the German player that knocked Nadal out of Wimbeldon 2015?
Ashes 2015: Damien Martyn - 'England are fired up again, just like in 2005...'

Damien Martyn: 'England are fired up again, just like in 2005...'

Australian veteran of that Ashes series, believes the hosts' may become unstoppable if they win the first Test
Tour de France 2015: Twins Simon and Adam Yates have a mountain to climb during Tour of duty

Twins have a mountain to climb during Tour of duty

Yates brothers will target the steepest sections in bid to win a stage in France
John Palmer: 'Goldfinger' of British crime was murdered, say police

Murder of the Brink’s-MAT mastermind

'Goldfinger' of British crime's life ended in a blaze of bullets, say police
Forget little green men - aliens will look like humans, says Cambridge University evolution expert

Forget little green men

Leading evolutionary biologist says aliens will look like humans
The Real Stories of Migrant Britain: An Algerian scientist adjusts to life working in a kebab shop

The Real Stories of Migrant Britain

An Algerian scientist struggles to adjust to her new life working in a Scottish kebab shop
Bodyworlds museum: Dr Gunther von Hagens has battled legal threats, Parkinson's disease, and the threat of bankruptcy

Dying dream of Doctor Death

Dr Gunther von Hagens has battled legal threats, Parkinson's disease, and the threat of bankruptcy