KL hopes to revive debt-ridden plant

KL hopes to revive debt-ridden plant

KUALA LUMPUR (AFP): Malaysian Prime Minister Mahathir Mohamad said Monday that the government hopes to revive its debt-ridden Perwaja Steel which is currently under investigation for alleged abuse of funds.

"We want to revive Perwaja and the government has decided that if we can find some ways of privatizing Perwaja to a party that can manage (we will do so)," he was quoted as saying by the national Bernama news agency.

Asked if any parties had shown interest in the state-owned steel maker, Mahathir said: "Yes...there has been some interest but we have to see that our national interest is maintained."

The Perwaja Terengganu steel plant was planned as a centerpiece of Malaysia's industrialization drive of the early 1980s but became one of its most spectacular corporate disasters.

It has accumulated losses and liabilities estimated by industry officials at 10.7 billion ringgit (US$2.8 billion).

The inquiry into the affairs of the massively indebted steel plant began in 1996 but was hampered when the Anti Corruption Agency (ACA) failed to get the cooperation of overseas witnesses.

ACA director-general Ahmad Zaki Husin said over the weekend that the Swiss government has agreed to cooperate and the agency could now conduct detailed investigations into Perwaja.

The ACA is investigating a 76.4 million ringgit payment made by Perwaja for what were described as "consultancy fees."

It said the sum was paid to two Japanese working for a consultancy firm, through the account of a Hong Kong company. The cash was then transferred to the account in Switzerland of a firm registered in the British Virgin Islands.

Mahathir said he hoped to see a breakthrough in the ACA's probe.

"We hope to have a solution and I hope that the information that we are getting from (the) Swiss (government) can result in some action," he told reporters at the eastern Sabah state at the end of a two-day visit.