KUALA LUMPUR (Oct 28, 2008): Prime Minister Datuk Seri Abdullah Ahmad Badawi today announced the suspension of the RM1.7 billion Eurocopter helicopter deal with the allocation to be redistributed to projects that directly benefit the people.
“We had decided during the National Economic Council meeting on Oct 13 not to purchase the helicopters at the moment because we need the allocation
for other projects and saving is very important for us now, to face an economic situation caused by the world economic crisis,” he told reporters after attending a Hari Raya celebration at the Defence Ministry.
“We need to relocate the allocation for certain projects… because we cannot just borrow the money when we need it. The best thing to do is to relocate, we will do the projects that can be implemented now.”
Abdullah, who is also Defence Minister, said the government had decided that only projects that will benefit the people will be given the allocation and that all ministries are required to lower their expenditure by deferring some of their projects.
“Suspending the purchase (of the helicopters) does not mean that we will stop buying any helicopters, as we will do it when the financial status allows us to do so. The Nuri (military) helicopters we have now are old and they often involved in accidents that killed not only the soldiers but also civilians. Therefore the old helicopters must be replaced,” he said.
Abdullah added that a decision to replace the 28 Nuris must be made by 2011 and the government would want to make the purchase earlier if possible as new helicopters will need three years to be delivered.
He said as a result, the ministry had studied the models of helicopters to be purchased and Eurocopter was chosen in the open tender as it fulfilled the requirements and specifications set by the ministry.
He denied the helicopter deal will cost RM2.3 billion as claimed by the Opposition, saying that the price for 12 Cougar EC725 helicopters from the European firm is only around RM1.67 billion.
Asked when the government will resume the deal, Abdullah said the government will first access its financial situation.
On the scrutiny by the Public Accounts Committee (PAC), which will be conducted today (Wednesday), he said since the deputy prime minister had agreed to a scrutiny by the committee, it will go on as it will also give the committee the opportunity to examine the deal with the officers involved in the purchase.
“It is a good thing for them (the PAC) to learn about the procedure used by the ministry and why the deal cost so much.
“The helicopters (are expensive as they) come with high specifications for combat, search and rescue as well as troop lifting purposes,” he said.
Abdullah also explained that the Brazilian deal with Eurocopter was cheaper, which involved the purchase of 50 Super Cougar helicopters at a price
consideration of US$1.2 billion, because the helicopters bought by that country were ordinary helicopters and they did not have the same specifications like those Malaysia intended to buy.
On the allegations that the deal lacked transparency, Abdullah said it was done through tender and he did not believe that there were any irregularities.
To a question, he said the government will decide whether Eurocopter will still be given the deal when the situation allows the purchase or whether another open tender will be called. He also said the government has yet to inform Eurocopter formally of the decision to suspend the deal.