The defense business is probably THE business to be in, at least in Malaysia. I found this report/allegation (depending on your opinion) on the net and it is quite a depressing read.
Earlier this year, Deftech, a wholly-owned subsidiary of DRB-Hicom, won a contract without an open tender to produce and deliver 237 eight-wheeled armored personnel carriers to the Ministry of Defense. DRB-Hicom is 55 percent owned by Etika Strategi Sdn. Bd., which is wholly owned by billionaire Syed Mokhtar Al Bukairy, one of Mahathir’s targeted bumiputras and a man who is extremely tight with UMNO. Opposition member Tony Pua complained on the floor of Parliament that the average price of RM29.4 million for each unit compared unfavorably with a Portuguese Army purchase of 363 similar vehicles for the equivalent of RM4.4 million each from the Swiss MOWAG CmBH Corp, Malaysia is paying a 6.6-fold increase over the Portguese purchase. Saudi Arabia, he said, bought 724 such vehicles for the equivalent of RM9.9 million from General Dynamics Land Systems-Canada, with Malaysia paying almost three times as much Government officials said the contracts don't compare with each other and that the government is getting more equipment, maintenance, etc. for its money.
“Further research has revealed that DRB-Hicom will be acquiring the AWC technology from a Turkish company – FNSS Defence Systems Inc which manufactures the Pars 8x8 AWV models,” Pua said. “With this deal, Malaysia will be its first foreign customer for this vehicle. What is perhaps of greater alarm is the fact that FNSS has announced that they have sold 257 units of Pars 8x8 AWVs to Malaysia for approximately US$600 million or RM1.83 billion or only RM7.1 million per unit,” Pua said in a prepared statement -- considerably different from what the Malaysians said they bought the vehicles for.
Pua also complained about the cost of six offshore patrol vessels from Boustead Naval Shipyard Sdn Bhd at RM1 billion each in the aftermath of another total fiasco. The Auditor General, in a 2007 report tabled in Parliament, alleged that a contract to build naval vessels given to PSC-Naval Dockyard, a subsidiary of Penang Shipbuilding & Construction Sdn Bhd, which was owned by another UMNO crony, Amin Shah Omar Shah.
SC-Naval Dockyard, which was taken over by Boustead, contracted to deliver six patrol boats for the Malaysian Navy in 2004 and complete the delivery in 2007. Those were supposed to be the first of 27 offshore vessels ultimately to cost RM24 billion plus the right to maintain and repair all of the country's naval craft. But only two of the barely operational patrol boats had been delivered by mid 2006. There were 298 recorded complaints about the two boats, which were also found to have 100 and 383 uncompleted items aboard them respectively.
The original RM5.35 billion contract ballooned to RM6.75 billion by January 2007. The auditor also reported that the ministry had paid out RM4.26 billion to PSC up to December 2006 although only Rm2.87 billion of work had been done, an overpayment of Rm1.39 billion, or 48 percent. In addition, Malaysia’s cabinet waived late penalties of Rm214 million. Between December 1999, according to the Auditor General, 14 “progress payments” amounting to Rm943 million despite the fact that the auditor general could find no payment vouchers or relevant documents dealing with the payments.
The Auditor General attributed the failure to serious financial mismanagement and technical incompetence stemming from the fact that PSC had never built anything but trawlers or police boats before being given the contract. Once called “Malaysia’s Onassis” by Daim Zainuddin, Amin Shah was in trouble almost from the start, according to a report in Singapore’s Business Times in 2005.
Eventually Boustead PSC was born out of the Royal Malaysian Navy’s dockyard facilities which were to provide ship repairs and maintenance services. Under the corporatization program advocated by the Malaysian Government, the dockyard was set up as Limbungan TLDM, a wholly owned government company. It has modern facilities to meet the maintenance requirements of the Royal Malaysian Navy fleet, from hull repairs to major overhauls and from radar refitting to weapon systems refurbishment.
The six patrol boats have now cost five times what the Royal New Zealand Navy paid for its patrol vessels, bought at only RM210 millon each (NZ$90 million) from BAE Systems, the second largest global defense company.
The irrepressible Raja Petra Kamarudin in early November found that the Philippines was buying Hamilton-class patrol ships from the US that would be deployed to the West Philippine Sea area to secure the country’s natural resources. The latest one is to be transferred by the first or second quarter of next year, to guard energy projects in Malampaya off Palawan.
“Malaysia is going to buy six patrol boats at a total cost of RM6 billion or RM1 billion per patrol boat. Of course, Malaysia’s patrol boats are going to be far advanced and more sophisticated than those of the Philippines who paid only RM31.5 million for theirs,” he wrote. “The Philippines’s patrol boats can only patrol the waters. Malaysia’s patrol boats can…well…patrol the waters.”
No comments:
Post a Comment