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
Have you tried new the Independent Digital Edition apps?
ebooks
ebooksA special investigation by Andy McSmith
  • Get to the point
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

Ashdown Group: Senior Accounts Assistant - Accounts Payable - St. Albans

£26000 - £28000 per annum + benefits : Ashdown Group: Senior Accounts Assistan...

Ashdown Group: Treasury Assistant - Accounts Assistant - London, Old Street

£24000 - £26000 per annum + benefits : Ashdown Group: A highly successful, glo...

Recruitment Genius: Installation and Service / Security Engineer

£22000 - £40000 per annum: Recruitment Genius: This company is part of a Group...

Recruitment Genius: Service Charge Accounts Assistant

£16000 - £18000 per annum: Recruitment Genius: Are you a a young, dynamic pers...

Day In a Page

General Election 2015: Chuka Umunna on the benefits of immigration, humility – and his leader Ed Miliband

Chuka Umunna: A virus of racism runs through Ukip

The shadow business secretary on the benefits of immigration, humility – and his leader Ed Miliband
Yemen crisis: This exotic war will soon become Europe's problem

Yemen's exotic war will soon affect Europe

Terrorism and boatloads of desperate migrants will be the outcome of the Saudi air campaign, says Patrick Cockburn
Marginal Streets project aims to document voters in the run-up to the General Election

Marginal Streets project documents voters

Independent photographers Joseph Fox and Orlando Gili are uploading two portraits of constituents to their website for each day of the campaign
Game of Thrones: Visit the real-life kingdom of Westeros to see where violent history ends and telly tourism begins

The real-life kingdom of Westeros

Is there something a little uncomfortable about Game of Thrones shooting in Northern Ireland?
How to survive a social-media mauling, by the tough women of Twitter

How to survive a Twitter mauling

Mary Beard, Caroline Criado-Perez, Louise Mensch, Bunny La Roche and Courtney Barrasford reveal how to trounce the trolls
Gallipoli centenary: At dawn, the young remember the young who perished in one of the First World War's bloodiest battles

At dawn, the young remember the young

A century ago, soldiers of the Empire – many no more than boys – spilt on to Gallipoli’s beaches. On this 100th Anzac Day, there are personal, poetic tributes to their sacrifice
Dissent is slowly building against the billions spent on presidential campaigns – even among politicians themselves

Follow the money as never before

Dissent is slowly building against the billions spent on presidential campaigns – even among politicians themselves, reports Rupert Cornwell
Samuel West interview: The actor and director on austerity, unionisation, and not mentioning his famous parents

Samuel West interview

The actor and director on austerity, unionisation, and not mentioning his famous parents
General Election 2015: Imagine if the leading political parties were fashion labels

Imagine if the leading political parties were fashion labels

Fashion editor, Alexander Fury, on what the leaders' appearances tell us about them
Phumzile Mlambo-Ngcuka: Home can be the unsafest place for women

Phumzile Mlambo-Ngcuka: Home can be the unsafest place for women

The architect of the HeForShe movement and head of UN Women on the world's failure to combat domestic violence
Public relations as 'art'? Surely not

Confessions of a former PR man

The 'art' of public relations is being celebrated by the V&A museum, triggering some happy memories for DJ Taylor
Bill Granger recipes: Our chef succumbs to his sugar cravings with super-luxurious sweet treats

Bill Granger's luxurious sweet treats

Our chef loves to stop for 30 minutes to catch up on the day's gossip, while nibbling on something sweet
London Marathon 2015: Paula Radcliffe and the mother of all goodbyes

The mother of all goodbyes

Paula Radcliffe's farewell to the London Marathon will be a family affair
Everton vs Manchester United: Steven Naismith demands 'better' if Toffees are to upset the odds against United

Steven Naismith: 'We know we must do better'

The Everton forward explains the reasons behind club's decline this season
Arsenal vs Chelsea: Praise to Arsene Wenger for having the courage of his convictions

Michael Calvin's Last Word

Praise to Wenger for having the courage of his convictions