DoD Fiascos

By Hakim Joe

First and foremost the one thing that pops up in one’s mind is the submarine deal. Overpriced, underachieving, massive commissions, murder tainted, corrupt practices and politically involved by the highest echelons both here and in France.

With a price tag of €1.04 billion or US$1.37 billion, Malaysia’s first submarine, KD Tunku Abdul Rahman, a DCNS Scorpène-class submarine arrived at Port Klang on 3rd September 2009 amidst a scandal hovering above its hull. Furthermore, defects and problems were found in the submarines such as the inability to submerge and faults in the coolant system of the first submarine, causing delays in the delivery of the second submarine (KD Tun Razak).

Are we purchasing a refurbished submarine or a brand new one? A submarine that cannot submerge underwater? Any decent manufacturer would have its product perform comprehensive sea trials before delivering the item to the purchaser, and any purchaser would have insisted that the product is in good working condition before taking delivery of it. We are not buying pirated DVDs here.

And then there was the super expensive Eurocopter deal, which involves a squadron (12 units) of Eurocopter Cougar EC 725 helicopters for an initial budget of RM1.1 billion (which ballooned to RM1.6 billion later). Luckily these helicopters were able to fly and perform as what and how the manufacturers stated on the fact sheet, which is fortunate because our Defence Deputy Minister Abu Seman Yusop openly admitted in Parliament that the multi-billion Ringgit military helicopters did not undergo any physical inspection prior purchase and that the deal was sealed based on the technical documents alone and the only time the VIPs got a ride (not the TUDM chaps) was during the Langkawi Air Show.

We now come to Armored Fighting Vehicles (AFV). In February 2011, the GOM issued a Letter of Award to Defence contractor DRB-Hicom Defence Technologies (Deftech) to “design, develop, manufacture, commission, supply and deliver 257 units of 12 variants of the 8X8 armored wheeled vehicles” from 2011 to 2018, and like many local manufacturers anywhere in the world, the vehicle will be developed in collaboration with a main foreign partner, in this case FMC-Nurol Defence System (FNSS) of Turkey. The contract is valued at RM7.55 billion, which makes it almost RM30 million a piece.

Deftech, like any happy contract recipient went on to state that they would utilize the transfer of advanced defence technologies from its technology partners and original equipment manufacturers (OEM) and that the contract would create new local OEMs through direct and indirect foreign investments and generate higher employment for the local defence industry. What Deftech forgot to say was that the so-called Malaysian-developed armored personnel carrier, AV8, is being built from the PARS APC and that it would be cheaper to buy them directly from FNSS (which is exactly what Deftech is doing at approximately US$600 million only or US$2,334,630 per unit).

Yes, an AFV would cost more with the technology transfer and whatnots but at RM30 million per unit, it is almost four times the cost to “develop” them as compared to just buying them directly from FNSS. At RM30 million apiece it is even more costly than a standard American M1-A1 Abrams tracked MBT. What more, the AFV design is from USA, the chassis is made in Turkey, the gun turret and ATGW launcher is made in South Africa, the engine is made in Germany and the communication system and electronics are made in France. Basically, we reassemble it here (under supervision) and maybe Malaysian OEM manufacturers might get to supply the 8 tyres (if they are really lucky).

There is also the TLDM RM3 billion SGPV/LCS budget that has doubled to RM6 billion (March 2011) and to RM9 billion (December 2011) for 6 units of frigates “built” by Boustead Naval Shipyard (BNS) to be delivered by 2017 thereafter. Of course BNS does not possess the
expertise to build them and hence a tie up with a foreign manufacturer who does possess the technology to manufacture them. Guess who this foreign manufacturer is? It is no other than our “cannot submerge submarine” manufacturer, DCNS of France, which is currently being investigated by French police for corruption.

From a mere RM500 million vessel, this “second generation patrol vessels littoral combat ship” now cost RM1.5 billion each, tripling the initial budget and to be built by BNS, the forerunner of PSC Naval Dockyard. With an annual operating budget of RM10 billion, the TLDM would find it extremely difficult to maintain these 6 new boats and what good would a warship be if it is docked in the shipyard?

There are a few battle tank jokes around and we have two. The first one is about how the Army decided to put a larger main gun onto a tank and reinforce the existing turret with thicker armor. What happened was that the tank was now so top heavy that it had to slow down to pedestrian pace to take a corner. Additionally, with the modified main gun being a mismatch with the tank chassis, this tank cannot fire on the run lest the recoil topples it over.

What the tank commanders literally had to do was to stop the vehicle before taking a shot at the target. Attempting to readjust this weight imbalance, they decided to slap on more armor onto the tank chassis to discover that the engine is no longer able to handle this
massive increase in weigh. Easy fix – just replace the existing engine with a more powerful one and Bob’s your uncle except that the new larger engine won’t fit into the space from the (removed) old engine. Another easy fix – just redesign and replace the old mounting blocks to fit the new engine. Total cost? It would have been better to get a new larger tank instead.

The second one involves our “fast reaction” Airborne Infantry Battalion. In any army of note and within a country that has a large real estate, the Airborne Infantry must be ready to transport troops, equipment, artillery pieces, AFVs and light tanks into the field of combat at an instance. During a field exercise undertaken by the Army in response to a mock combat situation, it was first discovered that our Scorpion light tanks won’t fit into the newly purchased aircraft transporters (by a mere few inches) and no matter how hard they tried and unless they want to rip the aircraft’s roof off, there was no way in heaven these light tanks were going in.

What they had to do instead was either to remove the wheels or to let quite a bit of air from the tyres (they chose the latter) before it’ll fit snugly into the storage compartment. So, we now posses a Fast Reactionary Force that needs to deflate the tyres of their light tanks and to reinflate them at the destination. Lightning speed indeed.

The best of the lot remains the Patrol Vessel (PV) project undertaken by PSC-NDSB (Penang Shipbuilding & Construction – Naval Dock Yard Sdn Bhd), not necessarily the most expensive and no one died because of it, but because of the comical manner in which this fiasco was managed. One, the delivery was delayed for almost 10 years. Two, the cost overruns amounted to RM1.1 billion the first time and another RM1.4 billion the second time. Three, the GOM has paid RM4.256 billion to PSC-NDSB before the project was taken over the Government-owned Boustead Holdings, apparently paid as advance payment for PSC-NDSB to purchase major and non-major equipment for the vessels (of which most of these equipment cannot be traced now). Four, the contract was for 27 units of PV for RM4.25 billion and the TLDM ended up with only 6 units of PV costing RM5.35 billion (to be revised later to RM6.75 billion). Five, when two of the PVs were finally delivered in 2006, the Auditor General recorded 483 defects and incomplete items. Six, 14 progressive payments amounting to RM943 million were paid out despite the fact that there were no payment vouchers or relevant documents associated with the payments and lastly, where is Datuk Amin Shah now?

Let us do a bit of math here. 27 units for RM4.256 billion equate about RM157.6 million each and 6 units for RM6.75 billion equates RM1.125 billion each which is 7 times the original price.

Then again there was the RM1 billion order for 4 units of Airbus A400M turboprop military transport aircraft to supplement the existing fleet of Lockheed C-130 Hercules. The budget has since been revised to RM600 million a piece and the delivery being deferred from 2013 to 2016. No reasons were given but is the GOM really running out of cash?

Okay, let us stop harping on defence spendings and try reminiscing the Mindef website that uses English phrases like “clothes that poke eye” and “collared shirts and tight Malay civet berbutang three”. Another was the brief summary of the ministry’s history on the website, which read, “After the withdrawal of British army, the Malaysian Government take drastic measures to increase the level of any national security threat”. Mindef has responded by blaming it on the Google Translate rather than the ineptness and sloppiness of its own web administrators and content writers. The good thing is that they have taken out the English version and it will be some time before the (correct) translation is redone (if ever).

Lastly, the two F-5 engines that seemed to disappear from our country to turn up in the Middle East on its alleged journey to South America. We are not talking about a few kilos of heroin (which could be smuggled) but a massive jet engine weighing a few tons each. How in the world does someone smuggle two jet engines out of the country?

Malaysia Boleh.