KUALA LUMPUR: I had refrained from making any comments on the new ceiling price for the new RMN SGPV/LCS/frigate as awarded to Boustead Naval Shipyard announced on Friday. Yes I did mentioned I believed the cost will go higher but thats it.
My hesitation is based on the fact that it is very difficult to pin point the cost of naval ships unlike other equipment such as tanks and armoured personnel carriers. Although some had stated that I was wrong to say that the AV8 being developed by DRB-Hicom as over-priced if compared to the Army budget, I am inclined to believe that I got it right. I stand to be corrected of course.
Back to the issue at hand. Comparing prices with other ships is difficult as most countries usually only announced the cost of the hull and it systems, conveniently not publishing the price of the combat and weapon systems, which accounted for 60 per cent of the total cost. It gets more confusing as some countries put old weapon systems on their new ships for example the Danish Absalon combat support ships and the South African Meko A200 frigates.
From the Canadian Defence Policy,Foreign Policy, & Canada-US Relations site:
“With that caveat in mind, the following are rough unit prices for the frigates mentioned in the text and the Single Class Surface Combatant.
• Danish – 1.5B Kr = $333M Cdn (Project Patruljeskibe)
• FREMM – 280M € = $447M Cdn (French version, diesel powered)
• FREMM – 350M € = $600M Cdn (Italian version, turbine powered)
• Dutch –400M € = $639M Cdn (De Zeven Provinciën class)
(or up to –450M € = $719M Cdn quotes vary according to source)
• Spanish – 400M € = $639M Cdn (F100/Nansen class, prices vary)
• Typ 125 – 550M € = $878M Cdn (projected German Fregatte Klasse F125)
• FREMM – 550M € = $879M Cdn (projected air defence version)
• Typ 124 – 700M € = $1.12B Cdn (German Sachsen class air defence frigate)
• CF SCSC – 1.06B € = $1.70B Cdn (Single Class Surface Combatant)
* these figures does not include Standard SM-2 SAMs.
From the list above, I believe only the Germans and Canadian cited the full cost of their ships apart from the Standard SAMs. As for the Laksamana-class frigates (my designation for these ships although the reader’s poll says Ganas-class) – not to be confused with the Laksamana-class corvettes in service – the cost of the programme (ceiling of RM9 billion, around RM1.5 billion per ship) from my guess-estimates is justifiable. Yes, we might get it cheaper but BNS and Kementah had to follow the government’s procurement policy which invariably raised the cost.
Of course we might get it even cheaper, if we did not buy the design (and the right to export, export to where?) and get a foreign shipyard like those in South Korea (as suggested by Azlan) to build it for us. We could also got it cheaper by getting ST Marine to build the hull for us in Singapore (they also probably bought the design of the Delta-class frigates) instead buying the design from DCNS. Anyways, I believed the price would be the same if we had bought the Sigma class frigate from Damen Schelde. On the how the programme was won that in itself required another post.
So how did they come up with the cost then? My estimates, per ship
Hull – around RM500 million
Combat systems, integration, training etc RM1 billion.
Specifications (to be confirmed)
Length 109 metres, displacement 2750 tonnes
Speed 29 knots, twin screws, powered by four diesel engines, probably in CODAD configuration and most probably to be supplied by MTU.
Combat equipment (to be confirmed)
A Bofor 57mm Mk 4 gun on A mounting, an eight cell MK41 VLS launcher at B mounting, navigation radar (most probably SAAB) ESM/ELINT (unknown, could be SAAB) radar (as the DCNS design has an enclosed mast for antennas, it could be the EADS 3D/4D radar, the former the same one on Kedah class or Saab/Thales); EO/IR/FCR (unknown, could be Rheinmental Oerlikon Contraves); NSM SSM in an eight cell missile launcher amidships: countermeasures, unknown, two Oto-Breda 30mm remote controlled guns, and helicopter approach radar (unknown type) hull mounted and VDS sonars (most probably from Thales and 2 x triple torpedo launchers (most probably the same as the Lekiu frigates).
Based on the specifications above, I believe the cost of the ships is justifiable as the price include the IP and the right to export (again to whom?). One caveat though, the ships must be commissioned with all systems in place and no increase in cost during construction, though I am not too confident on this part.
Of course, by adding six helicopters with ASW suite would bring another RM600 million to the cost of the whole programme. As for the total cost of the programme for the next 30 years, my best guess it will be around RM30 billion.
While the cost of the ships is justifiable one must look at the bigger picture of course. Is it justifiable for RMN to be spending RM9 billion for the next ten years? I do not think so if we look at our defence budget. Just read my post on the 2012 defence budget. That said, as someone said to me the other day, we will not be able to afford anything at all if we take into account the long term costs. The Datuk could be correct but as my old boss used to say there are many ways to skin a cat.
It will be easy to say “increase the defence budget” but with other pressing needs such as education and social sectors, defence will always be seen as a wasteful venture especially when most of her sons and daughters (including me of course) are not involved in it.
With no extra money expected in the near future, it is therefore imperative for those involved to do their level best to cut wastage and more importantly, not be swayed by their retirement plans.
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