How Much Is That Helicopter In the Window Part 2?

RMN AW139. Leonardo.

SHAH ALAM: In the previous on how much is that helicopter in the window, I wrote the leasing contract for the RMAF’s four AW139 twin engine helicopters. Go there if you have not read it before.

Well, this post is about the three Maritime Operations Helicopter (MOH/MUH) procured by the RMN. Two of the helicopters are expected this month while the third one is scheduled for delivery this September. All three will be shipped directly to the Kota Kinabalu Naval base in Teluk Sepanggar where they will be based and operated.

RMN Leonardo AW139 MUH flying over Vergiate, Italy. RMN

Well anyhow according to the VIP greeting book for DSA 2022 contracts day, the contract was listed at RM228 million which was about RM8 million more when the RMN chief said about them in September 2020. Perhaps the higher exchange rate caused the increase in the contract price.
The two AW139 MUH for RMN flying over Vergiate, Italy.

It must be noted that the contract was listed as

“in relation to Industrial Collaboration Programme (ICP) under procurement for the supply, delivery and commissioning of three Maritime Operations Helicopters along with two sets of mission equipments for the Royal Malaysian Navy”

. The contract is with Gading Aerospace (M) Sdn. Bhd.

Defence Ministry secretary general Datuk Muez Aziz (left) and Admiral Reza Sany in the cabin of one of the MUH. RMN

Yes, Galaxy Aerospace is the ICP partner for the procurement of the helicopters. Since the ICP terms are not published, I have no idea what it is for and its duration. It may well be related to the maintenance and other related activities on the helicopters and the two mission equipments.
Two of the RMN AW139 flying in Italy. Leonardo.

And unlike the leased RMAF AW139s, the RMN ones are equipped with mission equipments, two of them. This is likely the EO turrets and mission consoles on board the helicopters. The helicopters will also be armed. Release from Leonardo:

The RMN’s AW139 maritime utility helicopters instead feature dedicated sensors and equipment, including light weapon systems, and will be stationed in Kota Kinabalu. They can carry out a range ofmissions including, among others, SAR, medevac, utility, and anti-piracy. Deliveries were performed fast and well ahead of schedule. The AW139s add to the RMN’s Super Lynx 300 naval specialised helicopters.


— Malaysian Defence

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Shah Alam

22 Comments

  1. So,

    RMAF leased four for 265 million ringgit.

    but

    RMN bought three outright for 228 million ringgit (or around 18 million dollars each). With higher military spec than those leased by RMAF.

    No words to describe the utter waste of money done by the RMAF.

    In 5 years time, RMN will still fly those AW139 MUH as they are owned by RMN outright. While RMAF need to fork out more money to replace the leased helicopters.

    The irony is, malaysian defense procurement is full of similar examples. None of this discrepancies are highlighted by Ketua Audit Negara.

    Like how RMN spent 250 million ringgit on a 700 tonne patrol boat, when the same amount of money gets MMEA a 1800 tonne offshore patrol vessel.

    Or how the army pays 7 million ringgit for a MRAP that is sold to Thai Marines for just 2 million ringgit.

    But instead he chases mirages like the 2 million ringgit less disbursement by UN on a vehicle that the government did not pay a single cent for it. Maybe that is the only thing he is allowed to highlight, with other bigger discrepancies just swept beneath the carpet.

  2. RMAF is using the opex for Nuri maintenance as marhalim stated earlier. TLDM used available capex.

    Its government cash accounting…weird stuff.

  3. gonggok – No words to describe the utter waste of money done by the RMAF”

    Correction. It was “a utter waste of money done by the government” not “the RMAF”.

    The RMAF requested funding for a new platform but the government declared that funding would only be available in the next Malaysia Plan; resulting in the RMAF having no choice but to look at a leasing option. Now one can claim that the RMAF should have tried harder or done something else but I don’t have actual facts in hand thus I won’t speculate – ultimately it was a political decision.

    It was also a political decision to release funding for the RMN’s AW139s; doesn’t mean [in case someone makes the claim] the RMN did a better job of presenting or lobbying its case..

  4. You don’t do that kind ringgit to ringgit comparison without taking into account the Purchase power parity of each country

    For example the Arafura class is around 400% more then tun Fatimah despite both mostly in the same league.

    Anyway if you think the AG live under the thump of politicians ala CCP. Then think again

  5. I believed the money for the RMN helicopters is actually the one meant to fund ASW helicopters but then RMN decided against buying it. Why, it is likely the funds wasn’t enough to pay for the ASW helicopters that they wanted.

  6. Darth,

    You are quite out of depth here.

    What do you mean about purchase power parity? This article compares AW139 program of RMN and RMAF.

    Both RMN and RMAF are military services of the same country, Malaysia.

    As is for example comparing RMN LMS and MMEA OPV.

    And why suddenly mention about AG?

    Also for your information, the costs australia usually quotes is everything from signing up to scrapping the system. Not just the initial purchasing costs. Everything including anticipated maintenance, upgrades, salaries is calculated upfront.

  7. @Hasnan
    This is quite common in private sector as well. Many would do leasing for company cars but outright buy trucks for business usage. The leasing would expense as P&L while the buy would be tax deductible.

  8. @Marhalim
    RM228mil is defo not enough. It can’t even pay for measly 3 Seahawks and that is at Aukus friendship prices. For such limitations, it would be more realistic for TLDM to buy in staggered small batches ie 2 units per year as price per each could rival that of an F35.

    @gonggok
    Learn the difference between CAPEX & OPEX, and how they are used.

  9. joe,

    “Learn the difference between CAPEX & OPEX, and how they are used”

    That is not the point here. I know the difference.

    The most important point here is

    RMAF 4 year rental of civilian spec AW139 cost per helicopter = RMN outright buy of military spec AW139 cost per helicopter.

    And that is not right!

  10. Sigh… gonggok, let me ask you a hypothetical question.
    Say you need a car to get to work, but you have not enough money to pay for a new car downpayment or buy a used car, and you cannot get a motor or use public transport, but your salary is sufficient for a monthly rental plus some balance to save. What is your options left?

  11. gonggok,

    What are the key distinctions between a “military” and “civilian” spec platform? Can stuff be added to’make a “civilian” one into a “military” spec one? Is just radios, winches,self sealing tanks, etc?

  12. 5Zarft – ”Anyway if you think the AG live under the thump of politicians ala CCP.”

    Just like how you declared in another thread that Malaysia was the most democratic country in the region; are you saying the AG is totally independent and apolitical?

  13. joe,

    That is a stupid hypothetical question.

    Because why? You are still focusing on technicalities when you are missing the elephant in the room. Which is causing the government to lose money.

    Unlike your hypothetical question, whatever it is, opex or capex, the money comes from the exact single source, the MoF.

    Because of similar requirements of RMN and RMAF, both services could just surrender their budget (RMAF, nuri maintenance fund. RMN, ASW heli fund) back to MoF, and request a joint tender for utility helicopters. There can be workarounds for budgets. So both can get those helicopters outright for the same amount of money. The end result is that we want the money to be spent wisely.

    Right now it is not in the best interest of RMAF to be spending 66 million ringgit per AW139 just for a few years of rental, when it’s sister service RMN is buying outright brand new AW139 (with higher specs) for 76 million ringgit.

    Azlan,

    “What are the key distinctions between a “military” and “civilian” spec platform?”

    It actually depends on the platform itself.

    Some, like the blackhawk, purposely does not have full civilian certification so that surplus blackhawks does not ruin the civilian helicopter market. Some because of tender requirements, need a full civilian certification, like the MH-139A USAF version of the AW139

    So for AW139, not much differences between civilian utility version and military spec utility version.

    Main differences are the installation of secure UHF radios. Civil aircraft are only allowed to install VHF radios. Then there are special filters on multifunction displays so that the pilots can use night vision goggles (but civil SAR specs sometimes have this too). Some have additional wirings and switches for the installation of weapons, avionics such as missile warning, IFF, jammers and the like. Some, like the RMN helicopters, is equipped with military grade EO/FLIR turrets. Self sealing fuel tanks are quite normal across the board now. Most even have antiexploaion foam inserts on both civil and military versions.

    For other AW139 military add on parts, like wire cutters, intake sand filters, and exhaust IR diffusers (to make IR MANPADs lock more difficult) mostly have civilian STC certificates. So those parts can also be used on civil registered AW139s.

    Then there are just different paperworks. For example, flight profile or conditions that are not allowed if civilian registered, can be done by military registered example.

  14. TLDM & TUDM are moving forward to fill their chopper needs with each others respective plans, but what about TDM? Anything for PUTD other than the 6 LB? Are they gonna lease choppers too for their utility needs?

  15. In a perfect world the army and RMAF would operate a single type but in reality both services desire their platforms to do slightly different things: thus a common type is not possible. The army needs a platform to fulfil service centric roles such as troop carrying; under slinging certain things; as well as the standard CASEVAC and other mundane for vital things. The RMAF desires a platform for SF insertion; SAR/CSAR [never mind that the enablers are still.lacking].

    Naturally there will be some level of overlap but this is inevitable. The only way to do away with it would be a “Joint Helicopter Force” but this is too novel an idea for us as we have yet to reach that level of institutional jointness.

    As it stands; unless significant improvements are made with regards to manpower and a ground traning/support infrastructure; at the most the army will be able to absorb 8-12 airframes. Anything more than that will be a major stretch given inherent limkystions/shortcomings.

  16. Azlan,

    “The army needs a platform to fulfil service centric roles such as troop carrying; under slinging certain things; as well as the standard CASEVAC and other mundane for vital things”

    Which is why, in my opinion, the nuri replacement budget should be given to army PUTD, not RMAF.

    “The RMAF desires a platform for SF insertion; SAR/CSAR”

    If this is the case, why does the RMAF needs 24 more medium lift helicopters on top of the existing 12 EC725? You don’t need as much as 36 helicopters to do SF, SAR/CSAR. If those missions are the main requirements, 12-18 from the FVL FLRAA project would be the ideal platform, with double the speed and range of current medium helicopters. These should be to replace and not to add to the current EC725, which can be sold off.

  17. Just like how you declared in another thread that Malaysia was the most democratic country in the region; are you saying the AG is totally independent and apolitical?

    Do you and gonggok assume AG mean attorney general and not auditor general?

    If the AG sit under the politicians thumb. The department won’t consistently published damning reports every single years.

    MY is a trading nation and while it damning politically, MY never fabricated their numbers ala CCP. It’s not in the politicians interest to do so as lying about it would effect foreign confidence and thus impact on employment & economy which would screwed them over more then just lying about the numbers. Even the so called Nobita trillion ringgit debt is taken from offcial numbers. All he did is some creative accounting and compared apple to oranges just like his previous claim of oversized civil servants numbers.

    The same thing that gonggok is doing when he compared the LMS & tun Fatimah, He fail to take into account that LMS is build in china where the wages particularly on their east coast cost way way higher than ours. Not to mentioned LMS is a purposes build military vessel acquire under if not mistaken gov to gov deal.

    Thus as far as AG are concerned the LMS is delivered on time with no financial variabilities and it spefication fullfil RMN operational needs.

  18. Hmm… but what are they using to do those utility work? I mean the only ones left are the A109 which are just lightweight choppers, right? In that case, they still need the medium choppers whether as an outright buy or leasing.

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