“Eurocopter Deal MUST be Suspended Pending PAC Investigation”

By Shannon Teoh

KUALA LUMPUR, Oct 22 — The DAP has called for the RM2.3 billion Eurocopter deal to be suspended pending the outcome of the Public Accounts Committee’s (PAC) investigation.

    “I call on the Cabinet to take a definitive decision in its Friday meeting that the Letter of Intent issued to Eurocopter is suspended until the outcome of the scrutiny is known,”

its Parliamentary leader Lim Kit Siang said in a media statement today.

The Ipoh Timur MP had also asked the government to suspend the deal last week when it was revealed that the 12 Cougar EC725 helicopters being purchased would cost far more than other helicopters in the running.

Soon after, the PAC said it would scrutinise the deal and the Defence Ministry had also defended the deal saying it followed regulations.

However, it has also recently surfaced that Brazil would be acquiring 50 “Super Cougar” helicopters at RM4.2 billion, or RM84 million each. The 12 Cougars to be deployed by the RMAF average RM193 million each.

Lim called for the PAC to have independent experts advise on the investigation.

“Parliament should empower the PAC to engage consultants knowledgeable in aviation… and not be totally dependent on the Defence Ministry or Royal Malaysian Air Force,” he said.

He also urged the PAC to show greater urgency in investigating the deal as well as the RM5 billion Maybank takeover of Bank Internasional Indonesia and Telekom Malaysia’s RM11.3 billion high-speed broadband contract.

According to Lim, PAC has decided last Wednesday to scrutinise the three “mega-scandals” highlighted by the opposition Pakatan Rakyat coalition in the 2009 budget debate.

  • the RM5 billion Maybank purchase of Bank International Indonesia at five times the book value
  • the RM2.3 billion defence deal for 12 Cougar EC725 helicopter
  • the awarding of the RM11.3 billion high-speed broadband contract to TM Bhd

“I understand the PAC has not scheduled any meetings to begin its examination of the three scandals which is shocking. The PAC should work extra hard to scrutinise the three mega deals without delay.”

Malaysiakini Reader

SA Hamzah: What the writer failed to mention or conveniently decided to omit is the fact that Malaysia is buying the EC-725 at a whopping price of more than RM193 million each compared to other countries such as Brazil which are buying it at only RM82 million each.

That is a whopping difference of RM111 million each paid by our taxpayers. It makes me wonder how can someone like the writer (assuming that he is a Malaysian citizen) does not feel it justified that we scrutinise this kind of shady deals.

For his information, Brazil’s procurement deal not only included the setting up of an MRO centre but also a facility to build the aircraft locally for the Latin American market.

Whereas in Malaysian case, the MRO centre for Eurocopter had already been setup prior to the purchase.

As such, the procurement cost by the Malaysian government should be by right much cheaper since we can exclude the cost of setting up an MRO centre.

hope the writer will be able to clarify the above issues from an economic perspective and justify why we have to purchase equipment at twice the price.

If the author has any conscience, he will also feel guilty of other military procurement deals done by our country which followed the same shady trend. It is time for us all to say the buck stops here.

Why Brazil can get a better deal?

Lim Kit Siang also said that the committee should also investigate the way the “tender team has carried out the selection and check the scoring system to ensure there is no partiality in the grading”.

“Of particular interest to the PAC is the price differential in the Eurocopter deal by Malaysia as compared to Brazil, which is acquiring 50 ‘Super Cougar’ units from Eurocopter at a price consideration of US$1.2 billion, of which the first unit will be delivered in 2010, giving an average unit price of RM84 million as compared to the average unit price of RM193 million for the RMAF’s 12 Cougar EC725 helicopters.”


One Response to “Eurocopter Deal MUST be Suspended Pending PAC Investigation”

  1. Malaysians and helicopters making my head spin.
    Recently the fracas behind the purchase of Eurocopter( EC725 Cougar ) is making my head spin faster that helicopter propeller blades.
    but after giving it much thought I see the picture more clearly.

    The Government announced that it has signed a Letter of Intent with Eurocopter to purchase the long-range multi-mission helicopter to replace its ageing helicopter fleet of Sikorsky S61-A4 Sea Kings, better known as the Nuri.

    Previously when many pilots got killed in the Nuri defence minister Najib defended the saying that the Nuri’s were “reliable workhorses”.

    After much uproar he declared they would be phased out gradually.

    Then at the Lima parade in Langkawi last year, he saw the Eurocopters in action and got excited.

    Never mind that these helicopters were not workhorses but long range tactical copters.

    Who knows while transporting military personnel if war breaks out there would be no need to call for backup,
    after all our country is very vast and it would take forever for the Sukhoi jets to come to their rescue.
    So the copter can take on any threats head on and independently.

    We could also take advantage of its long range capabilities and offer the Australians back up support to patrol their coast.

    An industry source says that the EC725 was the strongest contender due to its ability to keep on flying even when running out of hydraulic oil,
    this is very reassuring if you have a sloppy maintenance crew.

    Then something happened, we found out that Brazil was buying the same thing at a much lower price than us.

    The opposition brought it up in parliament, ah but they did not realize that ours were fitted with additional accessories
    like rear view mirrors, air ionizers, flat screen TV’s not to mention fitted with radar warning receiver, 20mm cannons, rocket launchers and machine guns.

    All this however could not justify the more than 200% price hike, so the PAC (public accounts committee) was asked to investigate.
    While this was going on the government had declared the project “on again-off again” several times leading to Malaysian citizens
    who love conspiracy theories to get even more suspicious, finally they declared it OFF, citing economic downturn which they keep telling us we are immune from
    which is quite puzzling really.Nevertheless PAC was still asked to investigate.

    Then in true Malaysian fashion the “pass the buck game ” commenced.

    The former defence minister (soon to be our next PM) and current finance minister said he no longer foresees the defence portfolio,
    our soon to be EX-PM and current defence Minister said it was not done during his time besides he is new to the Defence Ministry-so he delegated it to the
    deputy defence minister, the deputy defence minister said that he is a military man and not familiar with costs, so he pushed it to finance ministry, then…
    you guessed it….The Finance minister who was the ex defense minister said that the finance portfolio was new to him, so he delegated it to his next
    in command in the Finance Ministry….who of course only understood macro economics, like how Malaysia was immune to the global financial crises,
    so he in turn delegated it to the Finance Secretary General but Malaysians were very pragmatic as this is the same runaround we are given when dealing
    with government departments so we just shrigged it off as something normal.

    Then the day came today was the day PAC was supposed to grill the Finance secretary general, guess what ? He doesn’t not turn up-
    AWOL, abducted by aliens or did he call in sick ? More amazingly PAC decide to continue with the enquiry.

    So now who became the idiots ? We all lah. Votelah summore for BN.

    Vijay Kumar Murugavell

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