No Middleman For FLIT/LCA Deal

Indonesian Air Force KAI T-50Is. Indonesian Air Force

SHAH ALAM: The purchase of 18 Korean Aerospace Industries (KAI) FA-50 Light Combat Aircraft was done without the involvement of middlemen, the Defence Ministry said in a written reply to a member of parliament on March 22. The reply said no middlemen was appointed as the purchase was made through an international tender.

It further stated that the ministry signed the Letter of Award on February 24, 2023 for the purchased of the 18 FLIT/LCA with KAI with the cost of RM3.8 billion for the period of five years. RMAF it said will take delivery of the first aircraft in 2026.

TUAN OSCAR LING CHAI YEW [SIBU] minta MENTERI PERTAHANAN menyatakan status perolehan Fighter Lead-In Trainer – Light Combat Aircraft serta sama ada syarikat perantara dilantik dalam perolehan ini.
JAWAPAN
Tuan Yang di-Pertua,
1. Perolehan 18 pesawat Fighter Lead In Trainer – Light Combat Aircraft (FLIT-LCA) telah dilaksanakan secara Tender Terbuka Antarabangsa, tanpa melibatkan sebarang pelantikan syarikat perantara.
2. Kementerian Pertahanan pada 24 Februari 2023, telah menandatangani Surat Setuju Terima (SST) bagi perolehan 18 buah pesawat pejuang ringan dan latihan lanjutan Fighter Lead-In TrainerLight Combat Aircraft (FLIT-LCA) FA-50 dengan Syarikat Korea Aerospace Industries (KAI) yang melibatkan kos pembelian berjumlah RM3.8 billion untuk tempoh 5 tahun. TUDM dijangka akan menerima pesawat pertama pada tahun 2026.

It must be noted that the ministry had quoted a lower figure of the contract price as opposed to was reported at the time by Malaysian media including Malaysian Defence. KAI stated the figure as US$920 million. A Google search showed its RM4.07 billion as off the time of this post. I have no explaination for the difference.

— Malaysian Defence

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16 Comments

  1. Paying with palm oil, coconuts or petroleum, it’s still money. Do they still palm oil for biodiesel?

  2. No middleman, just a middlewoman from Mongolia, that’s all 😉

    Despite what was said Parliament, even G2G deals can come up controversies if one digs deep enough.

  3. The article in ‘The Malaysian Insight’ sounds dodgy. Written by someone [who did some fast research] for someone and intended for a purpose. He says ”the PH-BN government must reconsider purchasing the ATR 72MP” but does not say why; merely that it has to be replaced because of issues he does not delve into. he also says ” explore other affordable and reliable options, such as the P-8 Poseidon ” – the P-8 is way above the allocated budget so how can it be ”affordable”.

  4. Even if the gov purchased directly from an OEM. The OEM would still hired some highly connected local to be their advisor, marketing agent & consultant.

    Even if we applied all of the good corporate governance we still won’t stop some individuals making millions. for example In the shortfin baraccuda program. The guy who when in gov wrote the submarine acquisition strategy is the same guy being hired after leaving public office by DCNS as advisor.

  5. Zaft – ”The OEM would still hired some highly connected local to be their advisor, marketing agent & consultant.”

    No Zaft you’re mistaken. You are assuming things you don’t know. At times OEMs are happy when there is no local agent because it can be a minefield; at times they require a local agent so it really depends. Take the Sabre beacons which the RMAF uses for example; the OEM has no need for an office here so they have an expatriate who represents them here. Pilatus on the other hand has or used to have a permanent representative here. Steyr had a here for years before they tied up with SME and sold anything. I could go on…

    Zaft – ”Even if we applied all of the good corporate governance”

    No and nobody said so but if we actually had corrective mechanisms in place and apolitical oversight; the huge cockup that is the LCS programme could have been prevented or mitigated.

  6. For MPA i think when come to budget and maintenance, it may sacrifice some of the requirements. And we got 2 Muslim country brothers are using it. Is already proven and it based as commercial plane, it will be a lot cheaper to maintain.

  7. Michael – ” And we got 2 Muslim country brothers are using it”

    What’s that got to do with anything? Who cares who’s using it as long as it meets our needs.

    Michael – “Is already proven”

    “Proven” based on what? Being operated iniby peacetime conditions by several users doesn’t necessarily make it “proven”‘ Has it been deployed it a high intensity war or taken part in a sub hunt where it’s sensors contributed to the sinking of a sub?

    Spare me the “proven” cliche

  8. Michael – There is no such thing as a Muslim country.

    Azlan – I did a read on Naval Group’s lithium battery development progress and thus far they’ve not tested it on submarines so let’s see how that goes in the coming years.

    What’s your take on the new Turkiye’s STM 500 submarine?

  9. Melayu Ketinggalan – ”What’s your take on the new Turkiye’s STM 500 submarine?”

    My take is that by its size/displacement it will not suit the RMN’s operational requirements; 500 tonnes is great for some navies but not for us. Turkey needs boats to operate in the confined Black Sea; Aegean, Sea of Marmara and other places; a 500 tonne boat operating with larger boats fits the bill. We operate subs in an open EEZ.
    Granted we do not need large ocean going deep water SSKs the likes of a Kilo or a Collins but 500 tonnes displacement is too small; can only carry ‘x’ number of weapons; will have limited range and endurance; as well as sensor issues.

    Someone might point out that advances in technology means things have improved with regards with sensor range; range and endurance; yes to an extent but inherent limitations still remain. It will be akin to saying if one can’t afford a MBT get a light tank. Problem is a light tank will have inferior firepower, mobility and survivability compared to a MBT. Back to subs; we’ve reached a stage where we have to cease focusing on the actual boat itself and figure out how in the future we can operate subs in conjunction with UUVs and other things. Still early days yes but we have to start looking in that direction.

    I also think we have to look at things objectively and do away with the simplistic notion that just because they are ”stealthy” that subs will always be more survivable or pose a great threat to opponents. Yes history is ripe with examples of subs having an affect far out of proportion but history has also shown that subs don’t have to be destroyed; merely prevented from doing their job – we saw this in WW1/2 where things reached a stage where Germans subs were too busy escaping detection and the destruction that came with it rather than do their job of sinking ships.

    Another point is that potential opponents also have subs and understand their limitations and that not only strong surface and airborne ASW units can pose a threat but also mines, underwater sensors and – increasingly in the future – UUVs. On top of that history teaches us that subs are particularly effective when operating in tandem with other assets for target detection.

  10. Even with no middleman, delay and problem could still arise. Government corruption is still rampant. As long as the finished product is not delivered yet, don’t you cheered just yet.

  11. Akmal – ”Government corruption is still rampant.”

    It’s not only corruption which is the problem but the decision making process; the various level of bureaucracy which can cause delays. Yes we have worked out that with or without local agents that corruption can still occur.

  12. I followed the discussions with great interest. My niche expertise is in Air Defence Radar and air operations. What ever that was said in the comments hve a good and valid arguments. The country posture for defense is still lagging in comparisons to our neighbours. Politicals imperatives are still the key push for our defence capabilities enhancements..

  13. @ Lt Col AmranM RMAF(R)

    Looking forward to have you here regularly

    What is your opinion on what we need to have as a minimum for adequate air defence? How do you see the FA-50, which will be replacing the MiG-29 as dedicated QRA resources? Is an AEW capability needed urgently, or is it just a want rather than a need?

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