PMX Again on Revamping Military Procurement

RMAF Hawk 208 M40-27 taxying at the RSAF Changi Air Base (East) in Singpore on May 4 as part of Bersama Lima 2023 exercise. Note the fixed refuelling probe on the side of the aircraft. RSAF picture.

SHAH ALAM: Prime Minister DS Anwar Ibrahim on Warriors Day (July 31) has again hinted of his intention to revamp the military procurement system. He said the revamped was to ensure outside parties can no longer rake in excessive commissions.

Speaking at a veteran entrepreneurship porgramme at Mindef, Anwar said the revamp must be done as the country’s defences were not coordinated with its economic growth and geopolitical and strategic position.

He was quoted as saying by Bernama

“Why I choose to mention this to all of you is because for veterans, for the military and, of course, for all of us, the country’s preparedness in the field of defence is an important matter.

“So, we suggest to the military leadership to revamp the procurement system; there can be no more interference from outside parties.

“The chiefs of staff are responsible for choosing the best warships, aircraft, tanks, and other equipment and should not repeat the same mistakes,” he said

This is the second time within two months, Anwar had stated that he wants to revamp the military procurement system. He last spoke about this on June 17 during a visit at the Butterworth air base.

As he was not quoted as saying anything in detail of the revamped he wanted to make at today’s function, it is likely that it is something still in the works. As he is busy with the current political situation – the August 12 elections in six states in the peninsula.

To be honest I was not expecting that PMX would have more details on the potential revamp as he had not even decided on the new secretary-general for the Defence Ministry as the previous one had retired on June 1 (after getting a one year extension).

Also apart from the military procurement system, PMX who is also the Finance Minister should looked into the procurement system of agencies under the Home Ministry, which are also prone to leakages and other shenanigans.

— Malaysian Defence

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25 Comments

  1. Well let’s see if it leads to anything tangible – we hope for the best but I’m pessimistic. Those who have been observing things for a while know that there have been previous attempts to revamp things.

    The problem is that how we handle defence is deeply entrenched in the system. A reflection of various things which have gone wrong in this country. Defence like other things is part of the patronage system. Unless there is the will to make deep rooted fundamental reforms and acknowledge that we’ve been cocking yo for so long; nothing will change and the MAF will remain under equipped with capabilities which don’t reflect all we’ve spent on it and we won’t get the best value for what we spend.

  2. As usual I doubt there will be anything substantial going on. Its more likely the politics doing the talking especially as you said, the 6 state elections are coming. Talk about acknowledgement is one thing, action speaks louder than words.

  3. They had good start with the FA 50 deal, afaik. Lets hope future procurement will be along those model rather than using local agent. Better straight to OEM or government to government.At least 10% atas angin commission can be taken out

  4. As long as procurement always have to benefit local industry – even in the absence of any business and economic sense for doing so – there will always be leakages. Local assembly with no follow on orders – waste. Indigenous development with no follow on orders – waste. Developing multiple national champions with insufficient contracts to support everyone – waste. Companies (or agents) know this so they still end up with rent-seeking behaviour, focusing on getting their commission instead of developing the company.

  5. FA-50

    Yes, RMAF got the best aircraft/platform for their LCA/FLIT requirement

    but we are still stuck with doing non-value added stuff, like local assembly.

    I would prefer offsets consisting of used defence equipment from South Korea, rather than meaningless IKEA-assembling of the FA-50 in Malaysia.

    Korean used stuff that can be great offset acquisition
    – KIFV
    – UH-60P blackhawk
    – Metis-M reloads
    – M167 VADS anti-aircraft gun
    – Frigates/corvettes/OPVs

  6. … – “– KIFV
    – UH-60P blackhawk
    – Metis-M reloads
    – M167 VADS anti-aircraft gun
    – Frigates/corvettes/OPVs”

    ROKN frigates/corvettes are high mileage and aged; we need them like we need a hole in the head. As it stands the RMN is struggling with operational costs [we can’t even afford to sustain all 6 Lynxs] and is trying to reduce its logistical/support footprint.

    Getting Metis rounds might lead to the bean counters cancelling the ATGW tender [such things have happened] and we need a non wire guided round with a top attack capability. In your mind we go ahead with the ATGW tender whilst adding to Metis; well the bean counters don’t think that way.

  7. The FA-50 deal is worth USD 920 million

    2-3 free ulsan class (value at USD 90 mil) to be used by RMN for 5-8 years to ramp up manpower training for the Gowinds. Then the weapons (3 ulsans have 6x 76mm oto melara, 9x 40mm twin DARDO, 6x triple tube torpedo launchers) could be used for future RMN frigates. If RMN cannot afford to operate the ulsans, how can it afford to operate the Gowinds?

    I won’t mind having 200+ KIFV (value at USD 100 mil) for free, freeing up IFV budgets for loitering missiles, UAV, MERAD etc for Tentera Darat. The aim for mechanized formations in east malaysia can be fulfilled with the additional KIFVs.

    Also won’t mind 12-20 free blackhawks (value at USD 100 mil) for PUTD, freeing RMAF medium lift helo budget for AEW and EW Attack.

    All above is valued at just 1/3rd of the FA-50 contract, while costing South Korea virtually zero as all of them has been paid for.

  8. … – ”to be used by RMN for 5-8 years to ramp up manpower training for the Gowinds. ”

    Never mind what you think looks great but did you even ask yourself if the RMN [the entity who does for real what we discuss in the cyber world] actually needs anything ”to ramp up manpower training for the Gowinds” [to quote your good self] or has it got things sorted out?

    … -”If RMN cannot afford to operate the ulsans, how can it afford to operate the Gowinds?”

    The RMN can’t afford high maintenance aged hulls … Why do you think it has rejected various offers for pre used hulls before? Aged but well used platforms are inherently maintenance extensive; same with aged but well maintained aircraft. The MAF is resourced strained and the RMN can’t even afford to keep all 6 Lynxs running for crying out loud.

    … -” The aim for mechanized formations in east malaysia can be fulfilled with the additional KIFVs.”

    On paper yes but what looks great on paper can differ in reality and we’ve been through this before. The KIFVs are but one element; where are the other needed components for these mechanized formations to come from? Where are the training grounds in Sabah to enable these mechanized formations to exercise at battalion level and to conduct live fire? How long will it take to get the needed manpower for these ”mechanized formations”? Do you need a reminder that we’re tight on manpower and that existing units has to be poached to raise new units in Sabah? Remember the conversation we had [when you were under a different guise]about how hard it would be for the army to enlarge Gerak Khas [you maintained it wasn’t hard] because its yearly intake [for those who pass selection] runs only in the dozens?

    If we want to discuss all that can be done and looks great on paper we can write a whole tome and blow our own trumpets but unfortunately in the real world other factors come into play.

    … – ”Also won’t mind 12-20 free blackhawks (value at USD 100 mil) for PUTD”

    Great but how long will it take for the Army Aviation Corps to get the manpower for these ”2-20 free blackhawks”? If you need a reminder; the Army Aviation Corps wasn’t flushed in manpower and resources to begin with and it’s stretched as it is operating the A-109s and Littlebirds plus the leased platforms. You also realise that it just barely has enough pilots?

    You have a penchant for looking at prices and looking at how things look great on paper [neat like a P/L sheet or a PowerPoint slide]; well I’m not trying to piss on your parade and yes in case you need to make another reminder; you have the interests of the country at heart [you’re not the only one] and are looking at options [of course you are] but look at other realities as well.

    … – ”while costing South Korea virtually zero as all of them has been paid for.”

    – Assuming they see value in doing what you think sounds obvious. To you the stuff is cheap and surplus to their requirements but would they actually agree to such a demand?
    – They do it with us and then every customer after that demands the same thing. Lest it be overlooked we bought a mere 18 airframes with nothing firm to indicate we’ll actually buy more and we get a whole list of goodies? A whole list for a mere 18 airframes?

  9. Based on little that i know, assuming thete is no increase in real defense budget of usd3.9 billion in the foreseable future, dont think our navy can afford the 5 + 15, best case just 8 patrol boat, 8 opv, 4 lms and 2 subs
    I may be wrong

  10. @ azlan

    In a single comment you can have enough sailors for 5-6 new Gowinds while not enough pilots for a squadron of helicopters?

    Each Gowind needs 138 men, and 5 ships mean 690. The 1st ship needs to be fully manned not during commissioning in 2026, but as early as 2024 when it would hit the water.

    PUTD 883 regt, they are originally approved for 12 nuris, and the manpower to match. Have been in touch with 883 regt crews, and they are still there, even for years the nuri has been grounded. PUTD still could have seconded RMAF crews, and RMAF still has plenty of crews in 3, 5, 7 and 10 skuadron with helicopter experience.

    As for koreans giving surplus gear with their weapons sale, yes it is normal for them.

    Indonesia got AAV-7s for their LPD, and recently offered 3 used corvettes (which china has counter offered with free type 056 corvette)

    Philippines got used corvettes (and more to come) for buying new corvettes.

    Korea even offered us used LSTs if we buy their mini-dokdo in the past.

    Other than the large order by Poland, the FA-50 buy for RMAF is one of the largest single order that KAI has in its history.

    Remember we actually bought brand new KIFV for only USD 600k each, 200 used KIFV does not worth anywhere my stated value of USD 100 million.

    http://defense-studies.blogspot.com/2009/04/malaysia-is-first-kifv-export-customer.html

    Not having dedicated armored training area now in east malaysia is the least of the concerns to deploy 200 KIFV there. It can always be created later. Indonesians have multiple mechanized units in Kalimantan without a dedicated armored training area there. Rather than needing hundreds of millions or even billions to stand up a mechanized brigade for east malaysia (which is a stated requirement by Tentera Darat), the investment will be considerably less with the free 200 KIFV.

    If my wishlist is too much, then 200 KIFV and 12 UH-60P Blackhawk will be good enough offset for me.

  11. … – ”In a single comment you can have enough sailors for 5-6 new Gowinds while not enough pilots for a squadron of helicopters?”

    You are conflating the army and the RMN now. Why not talk about the Boy Scouts while you’re at it or the Kul Klux Clan? The Army’s Aviation Corps is short of manpower [something you’re apparently in need of reminding]; what manpower there is stretched with what it currently operates.

    -How large do you think the Army Aviation Corps is?
    -How much manpower is needed for 11 A-109s and 6 Littlebirds [crews, support personnel; admin people; etc, etc? How many people does the Army Aviation Corps induct annually? Perhaps ask yourself these questions before assuming things.

    As for the RMN my question remains ” did you even ask yourself if the RMN [the entity who does for real what we discuss in the cyber world] actually needs anything ”to ramp up manpower training for the Gowinds” [to quote your good self] or has it got things sorted out?” … The RMN is also short of manpower but has planned accordingly for the LCSs and other ranks and midshipmen are trained on various asset which currently are operated. As such the RMN does not need the Ulsans for the reason you gave.

    … – ”Not having dedicated armored training area now in east malaysia is the least of the concerns to deploy 200 KIFV there. ”

    I have no idea about the Indonesians but things don’t operate in a vacuum. Those KIFVs have to housed somewhere and they need a place to train and conduct live fire.
    It’s not as easy as you make it out. Also, those KIFVs need other assets to work with … Also, you have any idea as to the practical and administrative steps and challenges at play in raising even a small unit? Need a reminder as to how many years it took just to raise the nucleus of other units and the fact we had to do the proverbial rob Peter to pay Paul?

    … – ”Have been in touch with 883 regt crews, and they are still there,”

    Happy for you. I also know some people in the position to know and they laugh every time I ask them whether the Army Aviation Corps has the manpower and resources in the short term to operate anything more than what they currently have. Manpower is tight and so are other resources…

    … – ”Remember we actually bought brand new KIFV for only USD 600k each”

    Do prices [which you have a penchant for] have a part in the discussion? My point is that the Koreans are unlikely to give us the stuff you’d like on the basis that we’ve only bought 18 planes. I also question your assumption that they’d jump at it just because the stuff you listed is ”cheap” and surplus to requirements.

    … – ”then 200 KIFV and 12 UH-60P Blackhawk will be good enough offset for me.”

    By all means knock yourself out and blow your own trumpets. As for me I’ll ask the pertinent questions I did. Where is the manpower coming from to operate and sustain the ”12 UH-60P” and how long will it take to create an sustain the needed infrastructure. As it stands we’re struggling to operate what little we have.

  12. ” Where is the manpower coming from to operate and sustain the ”12 UH-60P” and how long will it take to create an sustain the needed infrastructure ”

    It is not as if you have the only exclusive contact with PUTD. Your pertinent questions about PUTD has been mostly answered.

    As i said, i have been in touch with 882 regt (typo in my previous reply) personnel. They have enough personnel now to operate 4 blackhawks that is going to arrive. For over 8 years they have been gearing up to operate 12 Nuris.

    All needed infrastructure is now ready in Kuantan, with hangars big enough to shelter 12 helicopters. Kuantan was originally supposed to be the home for 882 regt and the 12 Nuris, then when the nuris grounded the facilities was to get the MD530G (rather then leaving it empty). Then when the blackhawks entered the picture, it is again now the home of 882 regt as originally intended. So it is not as what you say as if there is zero manpower resource and infrastructure to operate 12 blackhawks

  13. Speaking of Putd, why did they choose AW109 instead of another heli likes Bell 412 or Blackhawk which can carry more personnel

  14. IMHO pilot manpower isnt unsurmountable as long as we keep pushing the graduate pilot program, and washouts from the program could still be rerated for chopper duties, UAV piloting, RIO, etc. Its whether it will have sustained interest & funding, 2 things that mostly fail whatever undertakings we do in Malaysia.

    @Haiqal
    “why did they choose AW109”
    If I were to guess, it might be that they see the need for light utility and battlefield recon role, hence the A109. The Bell 412 or Blackhawk are more workhorse haulers so they perform different duties.

  15. There is OPEX – fuel, salaries for pilots, parts for maintenance (even if the helicopter doesn’t fly it needs routine maintenance), etc. It isn’t about buying the asset and pushing pilots through flight school. If there is no money to run the helicopters, its like buying pieces of metal that sits in the hangar collecting dust and rust. Have to ask the Army what are they prioritising – land assets, or air assets. National policy has set out the maritime domain as priority and ability to protect East and West Malaysia concurrently as the requirement. For a small budget Army, is it a case of getting more land assets to pre-position, or getting assets that enhance mobility (e.g. air assets). Maybe a bit of both. But its IMO an Army decision whether to spread out and buy a bit of everything and not enough of anything, for example, just 18 ATGW because they need money to buy 18 SPH, need money to buy some 4×4, a bit of 6×6, and a bit of this and that. Sure politics is involved, but Army does set the agenda, if they give a long wish list with bits and pieces, that’s a long list for intervention by certain parties.

  16. ATM are likely configured for high intensity but non protracted engagement. As Azlan had mentioned before, a lot of NATOs military are configured similarly.

    So it’s isn’t much of an issue as The idea is to concentrate on qualities & quantities would comes from foreign military offering a helping hands.

    A small amount of a lot of things isn’t particularly worrying, all we wanted is to have our manpower proficient in utilizing it & have enough stock of everything ‘to hold the fort’ while waiting for the cavalry to arrive.

  17. I find intrigue on this quaint idea that foreign militaries will come running to save us. Just who are they and where do they come from? Valhalla?

    Why would they come and save us as we aren’t a vassal state of another (I assume aren’t so, right? Right??). We aren’t a strategic asset unlike Ukraine and neither do we have the resources nor capacity to fight a superpower to a standstill.

    We would more likely turn into Niger where external powerplay influences the internal parties and leading to Govt changes, instabilities and coups and civil wars. We seen what happen to his rule when PM Najib had pivoted to China. DU30 would have suffered the same fate if he stayed longer and Marcos Jr knew better to pivot back to USA soon after.

  18. Indeed he was lucky his term was up and he could not seek reelection. But Marcos Jr could have stayed the course set by him if there was benefits to it, as it is it was better for him(MJr) to pivot back to USA if he know whats good for him.

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