AV8…What Others Are Saying…

PETALING JAYA: Malaysian Defence’s position on the AV8 is clear. Just Say No! to the AV8. Many others says otherwise and well, lets just say we agree to disagree.

But others, like the people of Defense Industry Daily is also saying that the AV8 is simply too expensive. Here is what is they are saying about it. And by the way, by quoting their comments here, I am not endorsing what they are saying, but just putting across what the authors think of the programme.

From Defence Industry Daily.

“The Malaysian army had expected to take delivery of a prototype AV-8 APC for testing in 2011, followed by deliveries from 2012-1018, but they didn’t sign the contract until mid-2011.

That usually means project delays. One mitigating factor is that the AV-8 contract builds on past relationships. Malaysia’s air force and navy are significant BAE clients, and Malaysia was already an FNSS customer as well. A series of contracts signed over 2000-2008 led to orders for 268 Adnan tracked vehicles, which incorporate design elements from BAE’s M113 MTVL and FNSS’ ACV-300 variant. They serve in roles including APC, IFV, ambulance, command, mortar, anti-tank, and armored recovery variants.

Overall project budgets for Malaysia’s “AV-8 APC” sit at RM 7.55 billion (about $2.51 billion), well above the $559 million going to FNSS and BAE. The question is why.

Statements to date have tried to justify it by citing development costs, but beginning from a complete platform like FNSS/BAE’ Pars 8×8 should keep those low.

Some of the extra $2 billion comes from the fact that this is an industrial project that’s paying to enhance a local industry and make a regional statement, rather than a straight purchase aimed purely at meeting military needs. Setting up that industrial infrastructure, training workers, and ensuring technology transfer does cost some money.

Then there’s the fact that Malaysia is best described as a partly-free country, where corruption is not unknown. Setting up the local industrial and support infrastructure offers very convenient opportunities to enrich political figures tied to sub-contractors, a practice that’s extremely common in the Middle East as well. There are also credible reports of straight corruption and graft in Malaysia’s previous major defense buys, going all the way to the very top of its political structure.

The question is whether Malaysia’s current political arrangements offer much in the way of countervailing accountability. History suggests that they will not.”

Yes I know a lot of people will have their panties twisted with the second last paragraph. But its must be said it is the perception of the authors, mostly due to the Scorpene affair. Mind you it is not just limited to DID. You might not see it in respected trade journals but if you speak to anyone in the industry most would say the same thing.

As for me, I have yet to be convinced by lame explainations why we must spend close to RM8 billion for a wheeled AFV when an off-the-shelf vehicle would cost half of that amount. As whether or not, it is graft, I do not have the evidence to say so.

–Malaysian Defence

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About Marhalim Abas 1717 Articles
Shah Alam

41 Comments

  1. the 500 million maybe our lucky figure
    since maybe the same figure cost lost of our
    MESMA..

    Reply
    Its not RM500 million but more like RM4 billion..

  2. Screw national interests!! Some local analysts have justified the cost because of the need to develop a local industry with know how to develop our own vehicle. Unfortunately, none of our ‘analysts’ or the editors of ADJ, Tempur or Perajurit have publicly asked the MILLION dollar question [or ringgit] – just who will buy our AV8? In the first place, many of us would be extremely interested to know what was the recommendation made by the Armor Directorate??

  3. Yeah we have all said so in earlier articles that the AV 8 is an unsustainable project as it is far too expensive for the military and the money is not well spent.Whether as alledge there are such things happening we are all not sure but what is sure is that with the money spent, we must gte a vehicle that outperforms all other vehicles. Better to buy the German Boxer with that type of money and may be also add in a batallion of light tanks like the ULSAN made by Austria and Spain

  4. Almost every single major defence buy we have embarked on has been covered in controvesy and had its share of cockups – NGPV, Scorpene, Su-30 MKMs, AV8, LCS. We seem to have this inability to lean from our mistakes and our politicians continue to put other interests first before that of the country. And to make things worse, we have opposition figures who can’t sem to be able to ask the right questions in parliment and who make an issue on everything based on innacurate info for political milage. Not to mention ‘know it all’ NGO’s who would rather disband the MAF and rely on a lightly equipped ara-military force to defend the country.

    If indeed the Europeans make us an offer we can’t refuse and we do buy the Typhoon, the whole deal will probably be another ‘scandal’ waiting to happen. MINDEF needs to learn how to explain things in a better manner to the public.

  5. why we need to paid such high price for something not battle proven yet..even turkish army has not make any order for ths 8×8 pars…

    Reply
    Thats the RM7 billion question…no answers yet….

  6. Why AV8 so expansive, built in msia no make sense, RM7 o 8 bil, wah no other choice kah, ni kalo ada org nak kantau ($$$$$) just say so kita org nak tahu jugak…….price tag……..

  7. Since we inherited instant culture and
    this culture clearly show when we just
    jump to 8×8 pars design without consider
    we just green in AV industri together with
    FNSS loby just make this expensive copy paste
    technology will proved that we can level
    field with singapore or indonesia in AV industri..
    maybe we just too kind to helping turkish with
    capital for their R&D and then their will sell this technology
    to other country with much lower price since we already
    bailout them..

  8. Errr..I named the chief beneficiary of the project but Marhalim decided he didn’t want to be hauled to court for something posted on his website. Not to worry, just follow the holdings. Who owns MMC & by extension Deftech? The anwer is painfully obvious.
    I can understand something for the Panamera Turbo Fund but it’s a little bit ridiculous lah. Tapi, kan ada GE on the way?
    Remember ya….it’s us idiots who fail to hold these politicians to account. Who is to blame? Rakyat bodoh lah.

  9. Tak pergi buat liputan berita persaraan PAT on his vision and achievement and future outlook on the ATM.
    But it will be good to ask him where is the missing jet engine or EC 725 his favourite helicopter! hehehe…..
    But don’t waste time if you have better things to do. regards.

    Reply
    What vision?

  10. Ashraf, it would be to simplistic to blame everything, like the opposition an NGO’s, on CORRUPTION. There are other factors at play here.

  11. It is hard not to blame it on corruption. Ever heard armed forces guys (especially the retired ones) do the coffee shop talk? Always some mention about corruption, who got what, who bangs what, got away with what…

    Reply
    It is easy to say so. Its hard getting the evidence.

  12. What is needed is for someone with power and influence to call for a truly-independent outside audit of all defence programs. Whether that be an opposition MP, MoD bureaucrat, General or other, the outside auditing firm should have NO connection to Malaysia, its government, its businesses, etc. Nothing that would taint its findings. And those who stand in the way of an audit… Easy, they should be branded for what they are: protectionists of corruption and graft or worse its beneficiaries. The Malaysian press needs to stand up and make an issue out of this. It all boils down to $$$. Even if the people don’t care about defence issues, they will care when it comes to money. Just imagine how many schools could be funded with RM 7 billion? How many hospitals? And so on. What is needed is an articulate and intelligent advocate for the people.

    Reply
    It is wrong to argue about hospitals and schools relative to defence spending. Yes its the popular way but defence spending is a necessary evil and by it self complimentary to schools and hospital, both must co-exist as without the other none will survive.
    With shrinking resources all around, Malaysia needs its defences more than ever. Xxxx happens and we must be prepare for it.

    The only way to ensure that defence spending is secure is to have proper leadership coupled with the institutions to do the check and balance. Waste and leakage will happen but with the proper management and oversight it will be kept to the minimum and war is kept away, far, far way.

  13. fareed,

    i dont think current gov will ever do independent audit regarding defence spending. too many leakage and involve too many people, from armed forces staff to very top politician. for sure scorpene issue will arise again. current gov not stupid, they need to cover their ass.

    of course they will bull shit with ‘it classified and national risks’ as usual.

  14. I don’t think the AV8 project is that bad. the govt must have a very good explanation and reason for this. Maybe it’s too dangerous to reveal the detail to the public. So, let’s just wait and see since we cannot do anything about this. Although the price tag is very high, but I believe that the percentage for corruption to occur in this case is low as the SPRM now is aggressively enforcing the anti-corruption law. Unlike the other party like in Selangor, the current incumbent leaders in putrajaya is a good leader that show a good leadership and care about the people’s money.

  15. Sure, you believe that? If SPRM is that aggressive they should be prowling buy now, ready to strike on the slightest move. RM8 billion is way too high, if there is such a thing as land supremacy than this could be our version. We just acquired our all our Pendekar, why not relaxed the TDM and concentrate on our air defense. The need for more MRCA’s and other integrated air defense systems is very critical. If we have air supremacy than the current army hardware should be able to withstand any threats from the ground.

  16. The AV-8 is an unproven system at best.At worst it may not even function in the way advertised.Its a purely unproven vehicle, period. Of the 3 or 4 vehicles tested during selection process, at least 2 has been battle tested if not in Iraq, then at least in Afghanistan. Of course the topograpgy may be different but then the Finish designed vehicle has been nicknamed as the ” giant green terror” by the Taliban and they hated that particular vehilce.Every time that vehicles backs up any infantry the Talibans will not want to stay and fight.Of courese the LAV is proven not to offer the standard of protection required.
    Another issue. All our armoured vehicles are armed by either 20 to 30 MM cannons or grenade launchers and HB MG. These has been proven in Mogadishu during black hawk down that it cant win a firefight.The us has mini guns-thye mini Gatling guns that can fire large quantities of bullets in a second. Some of our armoured vehicles should at least be armed with suh weapons to win a firefight if not by sheer accuracy, at least with such amount of bullets to keep the enemy’s head down

  17. So the issue is not the price but how was the selection of vehicle done?.There is no transparency, no accountability and is it the one selected by the armed forces or is it forced down the throat of the armed forces by some politicians?
    Thats the million dollar question
    The second question is whether the money well spent.Does we need to acquire technology in this manner? Singapore did not go this way.Neither had Turkey.Both Turkey and Singapore sought expertise to design and they manufacture in their own plant.We could aslo have done the same but then again is it necessary for us to do that? Can we really be a regional supplier for armoured vehicles and will we suceed? Look at Singapores and Indonesias vehicles-how many Asean countries bought their vehicle?.Singapore had more sucess as the British bought their newly designed armoured transporters for Afghanistan to replace their swedish vehicles.

  18. Cheekuchai,

    There are a number of blogs that contain comments by disgruntled and frustrated servicemen, who blame everything on corruption.
    The key problem is that blaming everything on corruption and having the facts and evidence to back their claims is another very different matter. Whilst corruption definitely exists, a lot of our problems can also be laid down to sheer incompetance and the need to put other interests before that of thhose who serve.
    We have a political leadership who lacks the ability to explains matters in a clear and transparent manner and we have an opposition who raises a hell of a lot of issues for political mileage on defence but has utterly failed to explain what their plan is for national defence, should they occupy Putrajaya one day [they have provided an alternative for everything, from education, tax rebates, water prices, etc, but no alternative defence policy except for crying foul on everything!!]. On top of that, we have a public that couldn’t care less and is indifferent to our national defence, so is there any wonder that we are in the mess we are in??

    What we need is a military leadership that is more vocal and assertive in standing up for the rights of the MAF, rather than one which acts like trained circus seals and who are more worried about pleasing their poltical masters. And one that is more than happy to dish out ‘honourary’ Gerak Khas and PASKAL berets to politicans…

  19. syameer,

    this is not the right site to kiss ass any politician. as u said if av8 is realy good then gov must explain and answers a lot of questions regarding it. i dont think any malaysian will buy proton car with bmw price, only the gov do.

  20. I am 1000% agreed with Azlan statement. Those people in opposition are like NATO, no action, talk only. There always blame the govt for corruption and etc but in fact, they, themselves are maybe worst. Don’t count on them to run this country. Like I said, the govt must have a really good reason to do that.

  21. I have named the main beneficiary of the AV8 project but Marhalim does not want to be sued.

    Reply
    I am just a poor reporter…

  22. Marhalim,

    Re:

    I couldn’t agree more. I firmly hold that defence spending should not be sacrificed for social programs. In fact Malaysia should be increasing its defence expenditures. My point was only that defence spending is a ‘hard sell’ when the government is wasting millions. In the eyes of the common man money wasted on corruption is better spent on schools and hospitals.

    Re:

    Again, I agree. The problem is: where is the leadership in Malaysia? Like I said, someone needs to stand up.

  23. Syameer, NATO acts when it is in its interest to do so like in Libya but when ‘great ally’ Saudi, sents troops to quell a Shiite unrest in Bahrain it does nothing. And when Assad of Syria uses military force on his citizens, NATO and Uncle Sam are largelyu silent.

    Pls don’t get me wrong, I’m not pro-BN. Unlike some people however, I’m under no illusions that our opposition knows best or that they are beacons of righthousness and justice. Politicans will be politicans – spinning stories and mincing their words is part of the game. Now if only various MPs would ask the Defence Minister the right questions in parliment, perhaps we would get better answers….

  24. Ym Lee,

    It is just not practical to install mini-guns in place of auto 20/30mm cannons on IFVs. Apart from the lack of accuracy and the tumble effect of the rounds, they are not useful at punching holes in light AFVs or buildings. They also have a very high rate of fire.

  25. As a person that involved in a few defence project, in addition to MasterT’s cue, I can contribute another one here. When they brief us how they manage the assets where our product will be integrated into the same management system, we were shock to realize that on top of the table they are using some very expensive aka sophisticate management system, but the way they operate completely wasted the effort and money to own such a system. From top to bottom the system discipline is not enforced, plus all the addons never get mature before they give way to another upgrade.

  26. I got confused from various reports that I read about our AV8 programme. First thing is will we locally produce our own AV8 or will we just assemble them here? I read these news that said Deftech will only assemble AV8. Here;

    “According to the agreement, major and critical components of the vehicles will be manufactured in FNSS’ own facilities in Turkey, including the customizations specially designed for Malaysia. Integration of customer-specific engine options, track, subsystems and sensors suite will be performed by FNSS. Parts will then be shipped to Malaysia for final assembly and testing under FNSS supervision. FNSS will provide their Malaysian counterparts with the required know-how and technology for quality assurance purposes.” from http://www.trdefence.com/2011/02/22/malaysia-to-buy-257-advanced-ifvs-from-turkey/

    “The contract has been awarded in February 2011. There are 12 different variations of the vehicles will be produced for a wide spectrum of missions. major and critical components of the vehicles will be manufactured in FNSS own facilities in Turkey, including the customisations specially designed for Malaysia. Integration of customer-specific engine options, track, subsystems and sensors suite will be performed by FNSS. Parts will then be shipped to Malaysia for final assembly and testing under FNSS supervision. FNSS will provide their Malaysian counterparts with the required know-how and technology for quality assurance purposes. The contract is expected to be completed by Q4 2013.” from http://www.strategicdefenceintelligence.com/article/ed325a3e5e/2011/02/23/Malaysia_awards_Pars_infantry_fighting_vehicles_co/

    I also found another site that claimed our AV8 programme is considerably overpriced. Read here;

    “The cost of the new vehicle seems excessively high – about $9.8 million per unit. Malaysian defense officials explained that these figures represent the total life cycle cost of the program, including which usually includes design, development, logistical support and sustainment as well as non-recurring engineering costs and investments associated with the set-up of local production facilities in Malaysia to develop its armored vehicle manufacturing. Yet, even when considering a 250% mark-up to cover such the price tag on the new Malaysian vehicle seem odd.” from http://defense-update.com/features/2010/april/malaysian_8x8_deftech_21042010.html

    For all intends and purposes, we did not have any responsibility to help Deftech, since it is a public company. Even though DRB-Hicom is a GLC, but Khazanah’s stake is too low (5%). Why would we have to pay a huge sum of money for them to upgrade their facilities? Then, should we expect something in return, at least increment of their stakes maybe?

    I think we should from now on preying for partnership in developing and manufacturing military hardware. For example, a few years ago, Sweden was looking for partner to reduce development cost for their AFV SEP. It is reported that Sweden has invested a total of 160,000 US dollar (roughly equivalent to half a billion ringgit). If we can strike a deal to locally produce the vehicle, providing that we agree to invest, say 50% for development cost, that would be cost around RM 200-300 thousands, or at most I guessed below RM 800 thousand. And we can order 40-80 6×6 SEP from Sweden for our UN-led mission rather than Panser Anoa for sweeten the deal.

    By collaborating with foreign nation, we can make up for our lack of expertize and money. But there are a few problems generated by this kind of development.

    Firstly is time frame. Since R&D take a lot of time, we should plan ahead. Let say if we need to have AFVs by 2011, we have to start looking for partner at least 3 years earlier. This is a tricky part. Not every nation will have the same requirement. For example if a nation, say Sweden need their AFV by 2009, whereas we need our vehicles by 2011, we don’t have to follow their programme time frame. We only have to pay early. By 2009 when Sweden already have their AFV, then we will start producing our own AFV to meet our requirement, 2011.

    Secondly, military requirement. Different countries have different requirement for their army. In this case, we should find partner whose requirement are closely similar to our own requirement or those who want to develop a flexible platform. For example, again says Sweden need 6×6 for their AFV programme whereas we want 8×8 configuration, we can negotiate with them to design and develop a 8×8 prototype for us. Or even better, when we acquire a know-how to develop 6×6, if possible we can locally design and develop our 8×8 AFV that meet the army requirement.

    Third, the commercialization of the co-develop product. I think the most challenging issue is licensing. I think since in a likely scenario where we co-develop something, we will not contribute much in R&D, apart from funding, it is fair if we do not get the license to export them. But it all depend on our creativity. We can increase our funding says from 30% (where we only get to locally produce but cannot export) to 70% so we can co-export them. Be creative. For example, if we receive an order from foreign countries, half of them will be build in Sweden and the rest in here if we agree to fund 70%, or if we agree to fund 60%, 60% of foreign order will be build there and 40% here. Another way is to manufacture different components, for example if we receive foreign order, we will provide electricals/electronics, tyre/track, suspension etc that can be produce cheaper than in Sweden, while the rest in Sweden, to make the cost even more competitive for export market.

    This is just an example. We don’t really have to invest in SEP (yes I know the project has been cancelled) or Sweden for that matter. I also aware that our AV8’s high cost has nothing to do with development cost. According to ministry, it is because we want to help our industry (Deftech).

    My point of view is privatization of our defense industries failed spectacularly. Since we went private, we have not seen any indigenous major product in service, apart from UAV. Brapi failed and we went to M4 instead, even after we paid almost double for Styer. No shred of evidence that we can make to boast. The way I see that the privatization of our military industries back in the 80’s were a way too early. Our expertize are too shallow and our companies are too small to stand alone. Even now they didn’t have intellectual capabilities and money for R&D. Singapore and Indonesia both developed their military industries by GOC like ST (50%) and Pindad (majority owned).

    Similarly, I think we need to wholly owned (or at least increase our share) in Deftech first, then we can invest. What good a private/public company that constantly rely on government support? My suggestion is that we should merge several key companies into a single (or two) giant and the government should become a major shareholder. Only by doing so can they have capital for R&D. Then the ministry should seek any opportunities to co-develop through this kind of company with foreign nation from the start of the programme, rather than to embark on lone programme. I think these steps are necessary for our industries to expand.

    Yipee!

    Reply
    The short answer is its CKD manufacturing. The actual R&D is only for the integrating the various sub-system ie turrets, RWS, radios, other electronics, engine and other stuff.

  27. OK All debates can end. It was reported in a defence publications that the Malaysian Government has issuded the Letter of Award to FNSS.Case closed.No amount of debate will make any difference.Just our own buttocks for not taking any actions.Talk is cheap yah
    Sorry no offence meant

  28. Why? Why waste money on a new production line with no economies of scale AND no independence? To sell an M4, SME has to get consent of Colt and the US State Dept. To amortize the line, the cost will be higher than Diemaco.
    CKD itu nothing more than ‘buat kerja’.
    We do have some decent defense mfg. in country but it is not supported as it does not have the correct mind set and return on favors.

    How can we NOT blame the government? Tak kan pulak ada lain yang bertanggungjawab? Epically weak logic like this is why the defense sector is broke dick.

  29. Maybe Malaysian AV-8 has “Transformers” capability? Thats why it so expensive?

    And of course such technology must be kept secret. There may even be a non disclosure agreement between MY gov and the Autobots. I am sure they dont want the Decepticons to know.

    So very hush-hush. Rahsia Besar. Just like the secret water agreement, secret toll agreement and secret IPP agreements. Too dangerous to let out.

  30. MR T,

    Instead of only airing your grievances here, why don’t you write to all the major papers, highlighting all the issues that need raising?
    You can also try to make an appointment with your MP, so that he/she can ask some questions in parliment…. [assuming the MP is not from BN]. The government is indeed to blame, but what are we doing about it ????

  31. Interestingly, today I read an ad in the utusan malaysia newspaper by the ministry of defense that is about a tender related to the future soldier system. So the project is on?

    Reply
    Yes, they need to link up with the AV8….

  32. Vote them out. And when the next lot of useless gits fail, vote them out.

    How many papers do you think will publish one word? Tak kan you aren’t aware who owns all the major papers…..right? Or the censorship on the QT that exists? That or you must have a very rosy view of the country we live in. You actually believe we have a functioning parliamentary democracy with all the associated niceties.

    If you remember the Adnans, the original LOI was the same price as the final contract but only for 88 units. Do you think it changed because FNSS was feeling generous?

    What have you done?

  33. The ”Future Soldier System”, though Thales and Sapura might not think so, is another waste of time and cash, and will be a distraction from areas of more vital importance. No doubt the Defence Minister and MINDEFs PR department will go full swing in explaining how the FSS will be of the very ”latest” technology but if we can’t even afford to equip even 1/3rd of our 35 RMR and RRR battalions with body armour, rifle sights and night vision, how are we going to equip a sizeable amount with the FSS????

  34. MR T,

    I have done nothing and I haven’t claimed to have done so – but then I don’t perpetually complain about everything under the sun, without offering a solution. You can always contact your MP [assuming he/she is not from BN]. We may not have a ”functioning parliamentary democracy with all the associated niceties”, as you put it, but we do have MPs who serve some purpose and who are willing to raise certain issues if it’s in their interests.

  35. What good is a solution if it will never see the light of day? Do you actually believe you can influence the decisions in kementah by raising it in parliament?
    Tell me, have you written to your MP to enlighten them as to the parlous state of our national defense? I know what I have done….perhaps you should tell us what you have done.

    Unless of course you are of the mindset that all is well on Jalan Padang Tembak like many.

  36. Mr T,

    Have I hit a touchy nerve somewhere?

    A quick glance through all my posts here over the past 2-3 years or so, will tell you I do not have the mindset that all is well in Padang Tembak…..

  37. Unfortunately, we all might just have to wait for Thai tanks to come roaring across the border, or Singaporean F-15s to drop bombs on Johor, or Indonesian infantry to raid into Sarawak, or the Chinese to sink a Malaysian naval ship in its claimed territorial waters, before our views are justified. Even then, every MP, Dato’, businessman, etc. will likely flee the country.

  38. our AV8 program is so expensive because ours can fly and attack our enemies from the air. that way, the MRCA program is no longer needed. govt is killing 2 birds with one stone.

  39. Its ridiculous to call in a third party to do an audit on national defence matters, particularly if they’re foreigners who have their own interests. The fact of the matter is, this is a national matter, and its our responsibility to get it right. It means having parliamentary or royal oversight of defence expenditure, that is bipartisan or tripartisan, and having its members uphold strict rules of confidentiality so that it does not become an avenue to gain political mileage.

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