RM10 billion is a lot of money. But we must accept that losses will be incurred in industrialising Malaysia. So said Prime Minister Dr Mahathir Mohamad about scandal-ridden Perwaja Steel.

There was no hint of regret in his voice. Nor was there any apology offered. It was, after all, a price Malaysians had to pay.

Lest we forget, Perwaja was Mahathirs brainchild. It was meant to be the cornerstone of his Look East policy of prodding key state-owned companies into heavy industries in the early 80s.

The Perwaja venture, launched in 1982, turned out to be a monumental flop. In its first year of operation, it lost about RM120 million. And it has continued to bleed ever since.

By 1988, Mahathir had to act. He roped in close buddy Eric Chia to turn around the ailing industrial giant. Chia was shocked. After all, he didnt know anything about steel. But if the PM asks you to do something, how can you say no?

Mounting debts

Perwaja under Chias stewardship failed to make a single sen in profit. Instead, it accrued debts running into billions of ringgit. The business tycoon left seven years later under a cloud.

By 1996, the government had assumed full responsibility for the companys RM2.9 billion losses and RM6.9 billion liabilities.

Perwaja, relieved of its millstone, was then handed over to a little-known steel firm Maju Holdings. They were told to do what Chia could not.

Not surprisingly, they too, failed.

Last week, Perwaja announced it would be closing a number of its mills and retrenched 2,000 workers  almost half of its workforce. The message was clear. The company is on the verge of collapse, yes, again.

For those who have criticised Perwaja, there is an uneasy feeling of deja vu . Over the years, numerous reports have been made against the steel firm. The police and the Anti-Corruption Agency were told, time and again, of alleged fraud and mismanagement.

To its credit, ACA did investigate. It zoomed in on a RM76 million payment that Perwaja made to NKK Corporation through a non-existent company, Hong Kong-based Frilsham Enterprises.

Company officials had also used a RM490 million ringgit loan, intended for the purchase of equipment for its mills, for other purposes. Other irregularities included a false purchase order worth RM58 million and a mysterious payment of RM889 million from a Japanese company.

Eventually, ACA said its probe was expected to be completed in "a few months". That was two years ago. Nothing has been heard since.

Action needed

This week, Mahathir vowed to punish wrongdoers in Perwaja and other state-owned companies. We have heard it before. Malaysians have had enough of such empty talk. Lets see some action.

For example, will Daim Zainuddin, the former finance minister, be asked to account for the payment the government made to his mate, Tajuddin Ramli, in what many considered as an exorbitant price for national carrier MAS?

Daims departure from politics and the corporate world has been widely interpreted as an unmitigated message that doing business in Malaysia will no longer be the same  that cronyism is no longer tolerated. But this couldnt be any further from the truth.

True, a police report was lodged concerning irregularities in MAS cargo division during Tajuddins tenure as chairperson. But dont expect this to go beyond police queries, if any.

Another one of Daims protege, infrastructure giant Renongs ex-boss Halim Saad, too, will be similarly protected.

After all, former deputy premier Anwar Ibrahim had alleged in a police report made in 1999  accompanied by supporting documents  that these two men were holding billions in trust for Daim, who was then Umno treasurer. Daim did not dispute this, but said that the money was held in trust, not for him but for the party.

Perhaps the current pressure on the three men is to ensure that Umno will get its money back. Which is why these men will remain untouchable. Throw anything at them  corruption, sleaze, scandals  and none of it will stick, much like water off a ducks back.

Will the government come clean on the Perwaja scandal? Dont bet on it. The Perwaja losses are a price Mahathir, and his group of untouchables, are unwilling to pay. Indeed, in industrialising Malaysia, the price will be paid by taxpayers. Thats you and me.