Malaysian Trade Ban: Contract for water supply criticised

A pounds 130m WATER supply contract in Nigeria involving the British company Biwater, which attracted dollars 141m ( pounds 97m) in soft loans from the UK Government, was strongly criticised by a judicial inquiry in Nigeria.

A loan at low interest rates from the UK's Export Credit Guarantee Department was granted to the Nigerian government and most of the contract fee was paid to Biwater before work finished on many of the water-supply schemes. Only 5 out of 49 schemes were working at the time of the judicial review.

The pattern is similar to the Malaysian water project, for which Biwater and its Malaysian partners were granted UK aid before work started.

In his report, the judge said a payment of dollars 22m ( pounds 15m) from the state water company had been made to Biwater without adequate bills to account for the work.

But the judge's criticism in 1984 did not stop the British Overseas Development Administration granting pounds 62m in aid for Biwater's Malaysian water supply contract in the financial year 1986-87. A further ODA grant of pounds 2.1m was made for a pounds 7.8m Biwater contract in Sri Lanka in 1988.

Yesterday a spokesman for Biwater Group said: 'The judicial review and the critical comments were of the Nigerian state water board. Biwater was only called as a witness.

'Regarding the dollars 22m. There were misunderstandings regarding the post-handling charges that the cost of a piece of equipment was valued at. Biwater was fully exonerated by the (Nigerian) government when they reviewed the findings of the judicial review.'