SHAH ALAM: PMX has defended the decision to lease the helicopters for the military and other government agencies – RM16.5 billion for 15 years – during the Parliament session on Thursday. Among others he said the government adopted the leasing model to reduce maintenance costs and at the same time improved the operational readiness of the fleet.
DS Anwar Ibrahim did not address the fact that the government will be paying some RM1 billion a year for 15 years for the helicopters. He also said the helicopters selected were based on the specifications and requirements of the agencies themselves.
Anwar, who is also the finance minister, told Parliament that Weststar Aviation Services Sdn Bhd was chosen for the programme after it responded to a Request for Proposal (RFP) from the Prime Minister’s Department Public-Private Partnership Unit. He said four companies responded to the RFP with Weststar chosen as it had the best financials, air operating certificate, and the European Union Aviation Safety Agency license as it has 138 pilots. The minimum start-up capital for the companies to respond to the RFP is RM122 million. The readiness rate for the helicopters during the leasing period was pegged at 85 per cent.
Tanah Merah MP DS Ikmal Hisham Abdul Aziz asked why the leasing contract was approved instead of an open international tender or through the government-to-government negotiations. Ikmal Hisham was the deputy minister when the previous two administrations approved two leasing programmes – RMAF with Weststar and Army – Aerotree Service Sdn Bhd, which was canceled recently, which Anwar hinted in his answers.
Anwar said the Italian government – which owned 30 per cent of Leonardo – (he met Italian prime minister Giorgia Meloni on the sidelines of the G20 conference in Brazil recently) – provided the guarantee that the maintenance for the helicopters will be top-notch.
“We wanted that the helicopter negotiations to be transparent and conducted directly between governments, excluding agents. This approach would streamline the process and avoid multiple discussions among various agencies,” Anwar stated.
Anwar further elaborated that the agreement involves collaboration with local higher learning institutions, such as Universiti Teknologi Malaysia and RMAF, to enhance training and technology transfer capabilities.
He also mentioned ongoing discussions to establish Malaysia as a regional hub for Leonardo helicopters. Batu Berendam Airport in Malacca has been proposed as a site for a training and maintenance center for these helicopters.
The Prime Minister noted that this leasing strategy is in line with practices in neighboring countries like Singapore, Indonesia, and the Philippines, offering greater flexibility and cost savings.
He also confirmed that the Army will also be part of the leasing programme apart from RMAF,RMN, MMEA, police, Fire and Rescue Department, and the Prime Minister Department. Apart from RMAF 12 and police’s seven helicopters, he did not give the breakdown for the other services and agencies.
It is unclear why Anwar cited the three Asean countries to justify the leasing programme as none of their militaries have leased helicopter in recent times. Only Indonesian disaster management agency had leased helicopters within the last decade for fire-fighting operations. This is mostly on case-to-case and short-term basis.
From the Hansard:
Dato’ Sri Ikmal Hisham bin Abdul Aziz [Tanah Merah] minta Perdana Menteri
menyatakan mengapakah kontrak sewaan pesawat helikopter untuk Angkatan Tentera
Malaysia yang dilaksanakan secara pajakan tidak ditawarkan secara tender terbuka
antarabangsa atau dilaksanakan secara Government to Government (GtoG).
Tuan Yang di-Pertua: Baik, silakan Perdana Menteri.
Dato’ Seri Anwar bin Ibrahim: Tanah Merah yang juga arif tentang perkara ini
kerana dimulakan sejak 2015, juga 2017 dan 2021. Tapi saya setuju dengan Tanah Merah
bahawa pada masa itu ia terikat hanya dengan Angkatan Tentera Malaysia. Tetapi dalam
perkembangan terbaru, saya lakukan begini. Satu, kita mahu supaya rundingan itu rundingan
yang agak telus yang melibatkan kerajaan dengan kerajaan dan tidak melalui mana-mana
ejen.
Keduanya, kalau ada keperluan umpama satu jenis helikopter, apakah perlu tiap
badan angkatan darat, laut, udara berunding secara berasingan termasuk badan-badan lain,
umpamanya polis PDRM yang saya ingat ada dalam senarai, bomba. Jadi, kita ambil senarai
kesemua yang memerlukan helikopter daripada masing-masing menjurus guna ejen dan
berunding ataupun tender berasingan, kumpulkan semua supaya kos lebih terkawal. Jadi, ini
yang pertama.
Malah Perdana Menteri Itali di Rio de Janeiro memang menyebut bahawa Kerajaan
Itali yang punyai lebih daripada 30 peratus saham di Leonardo, memang senang dan akan
beri jaminan supaya kerajaan akan memberikan semua kerjasama kerana dalam bentuk
leasing ini, dia akan mengelakkan daripada beban kita dari segi maintenance yang menjadi
masalah besar sekarang ini, bilion Ringgit satu tahun untuk keperluan bahan maintenance
dan kerosakan-kerosakan semula jadi. Sebab itu saya setuju meneruskan keputusan leasing
yang telah dibuat sebelumnya. Cuma kita perluaskan.Tetapi dia tidak umpamanya direct nego kerana kita buat request for proposal. RFP
ini di bawah kerjasama awam swasta yang kemudiannya diselaraskan oleh UKAS, meminta
semua syarikat-syarikat yang ada keupayaan, empat yang utama, siapa yang memenuhi.
Akhirnya, yang hanya mampu dengan kewangan yang punya an air operator certificate, yang
ada AOC ini, empat. Daripada empat itu, maka dipilih Weststar Aviation Services Sdn. Bhd.
yang telah mengemukakan tawaran melalui RFP ini.
Penilaian itu tertakluk kepada pertama, keupayaan modal yang agak tinggi. Modal
yang diperlukan awal ialah RM122 juta. Ini tidak dipenuhi oleh banyak syarikat lain. Kemudian
ada lesen air operator certificate, approved maintenance organisation. Kemudian, lesen
directorate general technical airworthiness, lesen European Union Aviation Safety Agency
kerana ada keperluan 135 juruterbang bertauliah dan lain-lain yang detail. Tetapi yang juga
menarik ialah kerana sekarang ini Weststar sudah punya 28 helikopter dengan Leonardo
daripada kontrak yang lama dan puluhan kontrak dengan Saudi menggunakan pengalaman
yang ada.
Inilah maka sebabnya mengapa kita teruskan tetapi syarat kita ialah mengumpulkan
semua dengan keperluan dalam negara iaitu TLDM, TUDM, tujuh untuk PDRM, 12 untuk
DR. 28.11.2024
7
TUDM. Kemudian, Agensi Penguatkuasaan Maritim Malaysia, mohon maaf, TDM dan
Jabatan Bomba dan Penyelamat Malaysia (JBPM) dan satu untuk kegunaan JPM. Ini
keperluan. Yang penting ialah maintenance, repair dan overhaul yang kalau kita lihat. Sebab
itu Singapura, Indonesia, Filipina memilih kaedah leasing yang kita putuskan sekarang ini.
Kemudian, konsep pajakan ini syarikat perlu memastikan tahap ketersediaan dan
kesiagaan helikopter yang dibekalkan pada tahap 85 peratus dan ini membantu. Kita tambah
lagi satu syarat iaitu kerjasama dengan institut latihan kita termasuk universiti, UTM dan
TUDM. Kemudian, mengambil kira persiapan penyediaan Malaysia sebagai hab. Dia ada
sekarang di Itali, di Miami dan ketiga di Malaysia. Mungkin dipilih Melaka kerana berdekatan
dengan Lapangan Terbang Batu Berendam yang kita setuju untuk jadikan sebagai pusat
latihan untuk helikopter Leonardo.Tuan Yang di-Pertua: Baik, saya jemput Tanah Merah.
Dato’ Sri Ikmal Hisham bin Abdul Aziz [Tanah Merah]: Terima kasih Yang Amat
Berhormat. Kita Yang Amat Berhormat, Tan Sri Yang di-Pertua, kita tak boleh ambil mudah
hal-hal keselamatan dan kedaulatan negara. Tentera kita mesti dibekal dengan kelengkapan
yang memenuhi keperluan operasi mereka. Melihat perkembangan geopolitik semasa dan
impak akan datang, maka telah tiba masanya kerajaan untuk beri keutamaan lebih tinggi
kepada pertahanan negara. Anggota tentera kita telah terbukti sanggup berkorban jiwa dan
raga untuk negara.
Yang Amat Berhormat, saya mohon sangat-sangatlah, kelengkapan kepada anggota
tentera, maaflah tak boleh cap ayam. Mestilah berkualiti, mesti ikut spec dan mesti ikut
keperluan user atau perkhidmatan darat, laut dan udara. Semua pembekal akan mengatakan
barang mereka barang yang terbaik. Namun hanya user yang benar-benar tahu keperluan
mereka.
Tan Sri Yang di-Pertua, soalan tambahan saya kepada Yang Amat Berhormat ialah
kenapa pendekatan pajakan aset dipilih berbanding perolehan biasa? Adakah keperluan
agensi-agensi keselamatan atau pengguna telah diambil kira dalam pajakan aset ini? Sikit
lagi ya Tan Sri Yang di-Pertua.
Yang Amat Berhormat, helikopter untuk military, ada military spec-nya. Mesti
berupaya multitask, multitasking. Apakah helikopter yang dibekalkan kepada tentera ini telah
menjalani ujian? Bolehkah buat under slump? Bolehkah bawa paratrooper? Bolehkah hantar
ration? Bolehkah terbang di Sabah yang berbukit-bukit? Bolehkah buat search and rescue?
Bukan sekadar trip dari poin A atau ke poin B.
Akhir sekali Yang Amat Berhormat, memandangkan inilah kontrak perolehan aset
yang paling mahal dalam sejarah negara, RM16.546 bilion. Kerajaan Filipina baru beli 32
pesawat helikopter Black Hawk hanya sekadar RM624 juta ataupun RM2.7 bilion sahaja.
Jadi, Yang Amat Berhormat, bolehkah cadangan penyewaan ini terlebih dahulu dibawa ke
Jawatankuasa Pilihan Khas Parlimen yang terdiri daripada pihak kerajaan dan pihak
pembangkang bagi pelaksanaan yang lebih telus.
Jawatankuasa ini boleh mengesahkan sama ada sewaan helikopter ini benar-benar
jenis aset diperlukan dan penuhi spec pihak end user. Selepas itu sewa bolehlah diteruskan.
Semua pihak akan berpuas hati. Dato’ Seri akan dikenang PM yang terbaik, no more D, dapat
A, A++ lagi Dato’ Seri. Terima kasih Yang Amat Berhormat.Tuan Yang di-Pertua: Baik. Terima kasih.
Dato’ Seri Anwar bin Ibrahim: Terima kasih. Yang Berhormat Tanah Merah, ini yang
pilih dulu ini Yang Berhormat. [Dewan ketawa] Amende je ini? Jadi yang pilih dulu itu syarikat
ini masa Yang Berhormat dan sebelumnya juga lagi. Spec ini betul, Yang Berhormat punya
komen itu betul. Spec itu ditentukan oleh badan-badan ataupun TLDM, TUDM ikut keperluan
mereka.
Tidak semua Leonardo itu dalam satu jenis. Bomba lain, dia kena bekalan air, yang
lain bekalan senjata. Itu secara detilnya tentu dipersiapkan dan yang minta dan beri syarat ini
ialah pasukan, bukan kerajaan. Maknanya sepertimana saya baca yang tadi TUDM, TLDM
masing-masing mengemukakan keperluan mereka. Ini telah diambil kira oleh UKAS dalam
memberikan recommendation kerana ini masuk operate dan maintain MRO.
Yang dibangkitkan juga ialah tentang sama ada dia ada keupayaan. Jadi, saya fikir
ini ditentukan oleh badan-badan yang berkaitan ataupun agensi berkaitan. Mereka tetapkan
specs dan specs itu mesti dipenuhi. Sebab itu Leonardo dia bangkitkan tentang keperluan
dia buat beberapa penyesuaian untuk memenuhi permintaan pengguna dan saya tidak fikir
dia jadi masalah.
Ini sebenarnya menurut dan malah kalau ditanya saya ya, mungkin tidak disenangi
oleh setengah pihak, ini lebih telus. Kita buat G2G, no commission, no agents, direct bagi
syarikat yang boleh. Dah tentunya kita bagi keutamaan syarikat negara. Kita tak pergi kepada
syarikat luar negara dan syarikat dalam negara yang punyai rekod dan prestasi yang
memuaskan. Baik.
Apakah ia boleh dibincang secara terbuka? Tidak ada negara di dunia ini Tan Sri
Yang di-Pertua yang membincang soal keperluan teknikal keselamatan untuk bicara secara
umum, tidak boleh. Saya tidak setuju kalau isu-isu pembelian senjata. Ini pun kita dah
umumkan setakat yang boleh diumumkan tetapi apakah keistimewaan tiap helikopter itu
untuk TUDM, untuk TDLM saya tidak fikir boleh dibahaskan oleh Jawatankuasa Parlimen. Itu
pandangan saya.
Boleh nanti kalau perlu Yang Berhormat, minta Menteri Pertahanan atau Menteri
Dalam Negeri teliti semula apa yang boleh disampaikan. Tetapi saya tidak fikir wajar untuk
keselamatan negara untuk kita bincang secara teliti soal specs dan keperluan dan kekuatan
masing-masing kelengkapan tentera kita.Tuan Yang di-Pertua: Baik. Saya jemput Batu Pahat.
Tuan Haji Onn bin Abu Bakar [Batu Pahat]: Terima kasih Tan Sri Speaker. Kepada
soalan–soalan tambahan pada Yang Amat Berhormat Perdana Menteri. Memandangkan
kaedah pajakan ini merupakan yang pertama dilakukan bagi aset penerbangan kerajaan.
Apakah dasar kerajaan iaitu dasar sewaan helikopter ini akan dipakai juga bagi aset-aset lain
seperti pesawat pejuang pada masa akan datang. Terima kasih Tan Sri.Tuan Yang di-Pertua: Baik. Silakan Menteri.
Dato’ Seri Anwar bin Ibrahim: Setakat ini, pada dasarnya Tan Sri Yang di-Pertua,
kita lebih setuju cara ini, pertama, dia tidak jadi beban kewangan kepada negara. Walaupun
setengah negara kita beli dengan lebih murah, tetapi kebanyakan kalau kita tengok
maintenance dia dan akhirnya dia ada keperluan pesawat yang maintenance dia itu lebih
mahal daripada pesawat pada peringkat awal.
Itu sebab mereka dikaji semula dan dianggap sebagai leasing MRO kerana
mengurangkan beban dan tetapi syarat kita latihan mesti di sini, pemindahan teknologi di sini.
Sebab itu kita gunakan Lapangan Terbang Batu Berendam sebagai pusat latihan dan juga
kilang, di mana yang mampu dilakukan. Itu syarat-syarat yang dikenakan.
Tetapi, prinsip ini setakat yang mampu kita boleh guna pakai walaupun pihak
Angkatan Tentera Malaysia mengatakan ada keperluan segera yang harus dimiliki oleh
negara yang tidak boleh menunggu soal leasing, makna beli secara langsung. Itu saya tidak
fikir kita boleh putuskan untuk semua tapi pada dasarnya, saya fikir inilah untuk kelengkapan
ketenteraan, kita pilih untuk sistem pajakan kerana ia lebih menjamin ketelusan dan elak
kerugian dan tanggungan kewangan yang tidak menentu untuk tahun-tahun akan datang.Tuan Yang di-Pertua: Baik. Ya Bagan.
Tuan Lim Guan Eng [Bagan]: Saya nak ucapkan terima kasih atas peluang yang
diberikan. Juga menyatakan sokongan terhadap apa yang dinyatakan oleh Yang Amat
Berhormat Perdana Menteri bahawa urusan rundingan ini dibuat secara G2G kerana ini akan
membolehkan negara kita untuk menjimatkan komisen. Di sini kerana ia menimbulkan
banyak teka-teki.
Bolehkah buat satu perbandingan CBA (cost benefit analysis) daripada membeli
yang baru berbanding dengan pajakan. Kerana khususnya apabila kita pajak, akan timbul
pula sama ada kita akan gunakan helikopter yang sama kerana dengan peningkatan ataupun
peralihan teknologi. Kalau kita guna helikopter yang sama untuk 15 tahun, ia akan jadi
obsolete dengan izin.
So, adakah ada dalam terma atau rujukan itu pajakan, helikopter ini akan diganti
dengan baru bukan gunakan yang sama. Kalau yang sama mungkin akan jadi lapuk.
Bolehkah dalam aspek ini, boleh buat itu CBA bahawa beli itu yang baru lebih mahal, lebih
daripada RM16.5 bilion berbanding dengan pajakan untuk tempoh 15 tahun. Sekian, terima
kasih.Tuan Yang di-Pertua: Silakan.
Dato’ Seri Anwar bin Ibrahim: Terima kasih Bagan yang arif bab ini. Tetapi pertama,
keperluan dalam pembelian ini ialah untuk 15 tahun. Selepas itu, kita boleh miliki dengan
harga yang agak murah dalam sekadar RM15 juta. Tetapi, saya ambil perhatian kerana
teknologi berubah, kecanggihan berubah, keperluan berubah ini benar Sebab itu pembelian itu mengikut keperluan semasa dan saya tidak fikir kita berakhir
keperluan helikopter untuk 15 tahun ini sahaja. Tentu dalam dua tiga tahun lagi kita akan
tanya malah itu pendekatan saya. Menteri Pertahanan lebih arif bab ini kerana kita
mengatakan bahawa Angkatan Tentera Malaysia harus berikan apa senarai keutamaan
mereka selain daripada helikopter dan LCS ini umpamanya.
Sekarang ini dalam peperangan Rusia-Ukraine dan dalam pertempuran kita lihat
baru-baru ini Iran-Israel dan Hezbollah, itu dron sudah menjadi sesuatu yang menjadi
keutamaan yang bukan keutamaan puluh tahun yang lalu. Jadi, kita akan melihat. Saya setuju
supaya kita sentiasa pantau dan lihat apakah keperluan-keperluan semasa kerana teknologi
berubah dan menuntut kita juga membeli barangan yang canggih yang upaya kita lakukan.
Walaupun kita syukur alhamdulillah setakat ini, rantau ASEAN ini dianggap rantau
yang di antara yang paling aman di dunia dan kepesatan pertumbuhan ekonomi yang paling
pantas di dunia. Mudah-mudahan kita dipelihara daripada permasalahan yang dihadapi oleh
banyak rantau lain.
— Malaysian Defence.
If you like this post, buy me an espresso. Paypal Payment
Sounds to me like the title header should be “PMX Defends His Crony”
Short & to the point.
That is a clear lie from the PM.
How can paying RM1.1 billion per year in lease is “cheaper” than just paying maintenance?????
Below is an irrefutable fact that helicopter maintenance for 1 year does not cost billions, actually not even 1/5th of a billion
https://www.malaysiandefence.com/bhicas-to-continue-maintenance-of-ec725s/
This recent contract to BHICAS to maintain 12x TUDM EC725 for 5 years is just RM378 million. Extrapolating for 28 helicopters for 1 year, that comes out just RM176.4 million a year !!!! So why do we pay RM1.1 billion a year not to pay RM176.4 million a year ???? Who is stupid enough to think RM1.1 billion is cheaper than RM176.4 million ????
My previous writings on this
https://www.malaysiandefence.com/leasing-of-helicopters-likely-to-go-ahead/#comment-930537
https://www.malaysiandefence.com/leasing-of-helicopters-likely-to-go-ahead/#comment-930853
Is this debacle going to be Anwar’s 1MDB moment? When everything starts crashing down for PMX administration?
I am not rich enough to defend the matter in court.
It does not go quack, quack, so we cannot call it a duck.
Here’s my hot take. The position for ministry of defense should only be given to Generals in the Malaysia Armed Forces and only they have the say what military assets we should buy as a nation. These rest are unqualified and should not interfere or speak on the behalf of the military.
It does not go quack, quack, so we cannot call it a duck. (Marhalim Abas)
Perhaps it’s a clockwork duck Sdr Marhalim.
at the end of the day, it is up to the PM and MOF to decide what things to buy and how to buy it. The one at Jalan Padang Tembak just there to sign off the decision of his/her higher ups.
No there should be separation between the military and the political power as well as the military should serve the interest of the nation not the other way around.
Having military junta during peacetime is the sign of a failing country
Eliphan fight Eliphan helicopter died in the middle… lain tanya lain jawab..
Hangus 16 bilion…
“The Italian PM guaranteed top notch maintenance work”
This is funny. That’s debatable the leasing plus maintenance cost already included in the tender. If i calculate correctly we could’ve got twice the quantity of helo parts included at 16B. He forgot one thing that his government only have 5 years until new election.
Sure political affiliation aside, anything this govt do is bad, the last 2 very good. Sure. But does anyone know how the lease is structured? I dont so I’m more interested in the lease struture to understand the cost. Because a lease is actually a loan. The govt actually pays principal and interest (or profit depending on sensibilities) hence why the large annual payments – those buying house and car would know. The difference in a lease is structurally there is no equity in the payments so no transfer of ownership. However there can be an option to buy at the end of the lease – paying an agreed residual value. If there is, the helicopters would be bought just later at a cheaper price. If not, govt creates new lease for new helicopters in 15 years time. It’s not this govt that doesn’t pay for defence. The last 2 govts, of which many commenting on this site are obvious supporters of, also did not fund defence and probably fared worst. If the current govt is willing to be creative in financing and the armed forces, polis, bomba can get new helicopters, paying more is the cost of getting things done. It’s funded. Armed forces rotary fleet nearly doubles in size. Polis, Bomba and MMEA likely to get new helicopters. Gets the job done. Period. If past experience is wait many many RMK before something is bought, I am open to alternative arrangements even if pay more overall, to get the assets today than pay “fair” but wait 15 years. Another thing people seem to have missed is the PM is saying, the leasing company has to setup a proper business for 15 years with local assets, equipment, personnel, pay tax, etc – an actual real physical business employing people to fix helicopters as opposed to buying where the local agent only collects rent and commission, no real business created. Separately, now that lease is on the table, could the govt be open to Saab’s Gripen + Eireye lease if its still available? Not 5th gen but still good and RMAF gets it’s AEWC and new fast multi role jets despite being single engine.
” this leasing strategy is in line with practices in neighboring countries like Singapore, Indonesia, and the Philippines, offering greater flexibility and cost savings.”
Not sure where he got this information or he knows something we don’t. Neither RSAF, TNI-AU or PAF leases their in-service helis.
Another thing to ponder
When at least RM1.1 billion of your OPEX every year for the next 15 years is spent just on paying the lease, that is also RM1.1 billion less money to spend on actually flying those helicopters, money for salaries, money to fill up fuel for navy ships and airforce fighters etc etc.
Will we see our operational readiness for the next 15 years significantly drop due to no budget to go out on missions????
“It does not go quack, quack, so we cannot call it a duck.”
But if it looks like a duck, swims like a duck, smells like a duck, well…
“Jalan Padang Tembak just there to sign off”
Indeed, as long as they get what they wanted and can freely use it I doubt they actually care who really owns those assets.
@Syam
“The position for ministry of defense should only be given to Generals”
You want to turn us into Myanmar, or Thai junta, or Pinoy military dictatorship? Theres plenty history when military & politics mix in. There must always be separation of powers to ensure our democracy is free.
@Kel
It doesnt matter who did it, it was so obvious a bad rotten deal for taxpayers & ATM. You even confused between lease & loans which arent the same thing. You can take loans to buy or to lease, but leasing is always never owned. Leasing is basically rental, even if you rent a home for 30 years you arent going to the owner and say now you own it rite?
You argued about a buyout at the lease end but unless theres stipulated a very small RM1 token sum, most leasor will sell you at book value, so taxpayers will still have to pay more to own it.
The short is, leasing was never value for money, it only works in the short to mid terms where a user has sudden need for it for a very short time or where usage is not constant and the user doesnt want to think about the maint issue (not the cost). Both scenarios doesnt apply in this case.
“current govt is willing to be creative in financing”
Creative in financing is using the same amount of money to get more. Pay more & get more is not creative, is normal. But paying ridiculously more just to get less than if buy outright is plain stupid.
Each Govt has their own fallacies in terms of defence, personally I didnt hammer that their getting more stuff, but to spend far much more than reasonable is just unacceptable not matter who it is. And sorry unlike you Im not enamoured by PH & PMX, made worse when their supposed to be the change that people had hope for. For me nothing has change. Different shit same smell.
And if long term rental makes perfect sense, might as well scrap our army and rent our defences.
@Hulu
Im not to worried about the OPEX for now, as we tend to budget a far bigger chunk to OE than DE. Some of the OE was so excessive that certain service arm managed to get virtually brand new ships under the pretext of refurbishment. Maybe it will bite us later when ancillaries ie salaries & pensions, get too much a portion and we struggle to pay the lease years down the line.
@Joe
“You want to turn us into Myanmar, or Thai junta, or Pinoy military dictatorship? Theres plenty history when military & politics mix in. There must always be separation of powers to ensure our democracy is free.”
I disagree with your sentiment. FYI, many ministers, including the ex-PM of Singapore were actually former high-ranking military officials in the past before becoming politicians. The ex-PM Lee Hsien Loong was a brigadier general, and Singapore remained a democratic country, so it is possible for Malaysia to elect military generals as ministers, especially the Minister of Defense, which is crucial for our sovereignty
People often complain rather than be grateful for the latest arrangements. Over the past 2-3 years, there have been numerous new assets for the Army, RMAF, RMN, and others. Just compare what our previous PM purchased for our armed forces to what the current PM has acquired: FA50M, Ada Class, and now helicopters for several branches. Not to mention, the Maharajalela class is terapung akhirnya atas laut for the first time in over 10 years.
While the leasing program may seem expensive, consider the bigger picture. The leasing company must establish a proper business for 15 years with local assets, equipment, personnel, and pay taxes—creating a real, physical business that employs people to maintain helicopters. This is in contrast to buying, where the local agent only collects rent and commission without creating a real business.
Regarding leasing versus loans: If we buy a house today for 500k, by the end of the tenure with a reducing balance interest rate of 4%, we end up paying almost double the price. Remember, a house is an asset in accounting, but vehicles, including these helicopters, are liabilities. Houses typically appreciate in value, while vehicles do not. Additionally, loans do not cover maintenance costs, repairs after several years, and other unpredictable expenses.
With leasing, the lessor manages, repairs, and continuously maintains the assets to ensure they are always ready for use, which is crucial for the armed forces given their need for readiness in emergencies. Furthermore, as PMX mentioned, after 15 years, we have the option to buy the helicopters for 15-16 million.
@Syam
“ex-PM of Singapore were actually former high-ranking military officials”
SG is different that they had a strongman (near autocratic) PM that ensured separation of powers and even those whom were in civil service/military had to cut all former ties. When they join politics their loyalty is to PAP & the established hierarchy thus they could not leverage their past influence within PAP (& thus the Govt), they had to start from scratch and build up their image from there. Even Lee family do no get a pass and thus LHL siblings were sidelined when they could not follow the hierarchy establishment.
This unlike the various regional juntas where generals becomes self elected PMs/presidents/political councils. While were not near there yet, its a slippery slope once we start to fall.
@Alzar
“Over the past 2-3 years, there have been numerous new assets”
If you even bothered to notice, most of the current receiving equipment were orders/tenders that were made 2-3 years ago.
“what the current PM has acquired”
Is nothing to shout about, its what was planned way before he sat on PM seat. With RM 1.1 Bil, you can pretty much ensure a business can survive on a minimum scale for just 15 years. And if they go under its not like ATM can do anything. Sue an already bankrupted person? Sure…
With leasing your not saving anything on the maint, your basically front loading all that costs so your paying it upfront. If we already have that money, might as well buy and worry about maint later (we dont have an issue to maint current use anyhow). You might argue about cost of inflation but dont forget the company can reinvest that RM 1.1Bil lump sum, they arent in the business to be stupid.
RM 15-16 million is expensive when we could use that to buy used choppers today. US has excess retired Lima Blackhawks that are of recent modernity.
It seems sycophants here dont really have anything new to put up other than to regurgitate what flipped logic their PMX vomited to them for sale to the rakyat. Again let me point out, if long term leasing makes all kinds of sense, why arent we giving BlackWater, Wagner, etc, a call?
” While the leasing program may seem expensive, consider the bigger picture ”
It is already considered. Do you think without leasing there is no MRO (Maintenance Repair Overhaul) infrastructure in Malaysia? For helicopters we already have
1) BHIC AeroServices Sdn Bhd (BHICAS) supporting Airbus helicopters servicing
2) Galaxy Aerospace
3) AIROD
4) Weststar themselves
5) etc.
Leasing does not add any value to the existing malaysian MRO ecosystem. What value there is to spend RM16.8 billion for 15 years ( RM1.12 billion per year)?? When buying outright and giving out servicing contracts as per normal is much cheaper??
Lets do this with facts and figures shall we.
This is the leasing list.
https://pbs.twimg.com/media/GZIqh2RbkAAkPik.jpg
You can see not all of them are AW149s. A big chunk of the lease comprises smaller, cheaper helicopters like the AW139 and Bell 429 GlobalRanger.
For example, servicing contract for 12x EC725 (a far bigger and more complex helicopter than the AW149) for 5 years, a contract that just been approved in August 2024, costs RM378 million. That is only RM6.3 million per helicopter per year in maintenance cost.
https://www.malaysiandefence.com/bhicas-to-continue-maintenance-of-ec725s/
RM6.3 million annually comes out to just RM176.4 million for 28 helicopters. So why do you pay RM1.12 billion per year instead of just RM176.4 million per year??
RM176.4 million annually for 15 years is just RM2.646 billion. So where is the value of leasing for the armed forces? Maintenance is still being done in malaysia, by malaysian companies, with malaysian engineers and technicians even without the lease.
Lets now look at how much would it costs to buy those helicopters outright.
This is the cost of buying outright AW189 (civil AW149) for APMM
https://www.bernama.com/en/news.php?id=2295592
RM530 million for 4 AW189. That is about RM132.5 million each
What about Bell 429? Police-spec 429 costs about USD11 million (RM49 million), nearly 1/3rd the price of a AW189.
https://chicago.suntimes.com/chicago/2024/08/16/chicago-police-helicopter-dnc
Anyway, lets just pick the bigger price and times it by 28 helicopters. RM132.5 million x28 is a total of RM3.71 billion.
buying outright 28 helicopters and paying service for 15 years is
RM3.71 billion + RM2.646 billion = RM6.356 billion. Or basically paying RM3.71 billion up front and paying RM176.4 million service fee annually for 15 years.
The difference of cost between leasing and buying outright and servicing as usual
RM16.8 billion – RM6.356 billion = RM10.444 billion !!!!!!!!!!!!!!!
Where is the value in this ????????
We bought 2x Scorpenes for RM3.7 billion.
https://www.malaysiakini.com/news/11663
With the RM10.444 billion not wasted on leasing, we could buy weapons that would help to defend our maritime zones from being annexed by other countries. Weapons such as additional submarines, shore-based anti-ship missiles, multi role combat aircrafts, long range precision strike systems etc. etc.
Also siphoning RM1.12 billion annually for 15 years from our CAPEX (buying outright is from OPEX budget) instead of just paying RM176.4 million service fee annually will decimate the operational readiness of the whole military. That is RM943.6 million less annually for 15 years to fill up fuel tanks of helicopters, fighters, patrol ships, trucks and tanks. RM943.6 million less for emoluments, bullets, food for our soldiers. Is this actually the best for our nation defence?
Dont forget, that Leonardo also has their own MRO facility in Subang. Most of the engineers and technicians are also local.
Well ofcourse he is.Wrong for others,right for him.Theres a pattern there isnt it?.Here i thought that this administration/govt/pm are at least alil bit better than the last one..how naive i am.Even phillipines bought blackhawks/s70 in bulk..But here,a more ádvance’and ‘richer’country stuggled even to buy a mere 12 helos.
And this lease shenanigans cant be reviewed by PAC cuz “military and defence secrecy” bs.If that ghost ship tender that now skyrocketed to 11 billion falls under PAC jurisdiction.I cant see why this helos lease proposal cant be reviewed by that same PAC.Almost everyone can see outright that this scheme are to enrich cronies and “sponsors”.
@Hulu
“Or basically paying RM3.71 billion up front”
Sycophants will argue that RM 3.71 Bil (one off) is bigger than RM 1.1Bil (per annum), but I will say that we tend to buy things in phases so if we have the same RM 1.1 Bil per year that were going to pay for lease, we can easily lay out the outright buy into 3-4 yearly batch purchases of 7 choppers per year.
This slow induction also helps on the limited manpower (that some keep harping on), so it works if our chopper grad program could output 7 crews per year rather than lump sum 28 crews on the first year.
“Is this actually the best for our nation defence?”
This is actually the best for our nation cronies. When one tells people something has change but nothings really change yet people buys it.
Its not the fault of the PAC that the LCS project cost go higher. The PAC just highlighted the fact that with the original budget it cannot be completed. All of the government since 2017 (read my stories that on LCS which says that even the Najib government knew the RM9.1 billion budget was not enough) agreed to that fact but only the current one agree to pony up the money to complete the five ships. It must be noted that the actual estimate to complete the six ships was RM14 billion.
Err what i mean,if pac can review and audit lcs project then i cant see why pac cant do the same for this helos leasing project.Im not saying that the increasing cost of lcs are caused by pac.Of course not but heard/read that this leasing project cant be touched by PAC cuz that leasing project are being covered under “national security secrecy”.Whatever that is.
“It must be noted that the actual estimate to complete the six ships was RM14 billion.”
As I alluded way back before, this was the ‘creative finances’ that someone above lauded.
This as well as the OPV project was always intended to require supplementary budgets to ‘topup the shortfall’ real costing that are likely not to get scrutinised from all parties. I dont think there was intended malice or misappropriations rather its to hoodwink the rakyat & then Opposition that these projects can be made ‘locally cheap & value for money’ but the beancounters obviously knows the facts otherwise. LCS & OPV went into trouble when PH 1.0 Govt (and others) didnt follow the script to play ball and pulled the handbrake on further funding. Thus where we are today.
While one can commend PMX for finally getting them back on track, imho its not a plus for him rather its damning that previous Govts froze the project and didnt want anything to do with it thus sitting on the decision for years particularly during Covid.
It’s good to question the government’s decision but have we got all the facts? A 2011 newspaper clipping shows PETRONAS signing a 10-yr helicopter services agreement for 9 AW139 choppers at RM4.2 billion with Weststar. Granted it also includes the pilots’ salaries but factoring the inflation, contract duration and number of aircraft, it doesn’t look that far off. Wallahu’alam
Joe, even during Najib’s time the LCS was in trouble. As I mentioned political affiliation aside, the previous 2 govts wanted to keep doing what the pre 2018 govt wanted to do – in my opinion. Delay is ok as long as eventually complete. Delay tak apa. Buat ikut process dan pelan tak penting. Janji eventually siap. Less Joe forgets, the first LCS was supposed to be delivered in 2019. Based on your memory in 2018, was that timeline possible without extra money? We already know from various hearings including from the PAC controlled by your party – which the first PH govt decided PAC chair must go to opposition – that the problem was already known before the change in 2018. Yet previous 2 govts didn’t acknowledge that fact and kept to BNS’s script that budget cukup, semua salah Covid. If you like the old ways of doing things, of janji siap tak kisah macam mana, delay tak apa janji siap, sure no problem. As for leasing, sure buying is always preferred, but buying would require borrowing from future RMK since all current approved funding for RMAF has gone to big ticket items LCA, MPA, and MALE. Borrowing from the future has always been the way. Its not something created by this govt. Now take a step back and look at the big picture. If the govt borrows from future RMKs to buy the helis, what program will the helicopters take money from? And again, leasing is a type of financing. Don’t just read blogs or listen to people you agree with. Do your own research and understand the many different ways a lease can be structured and that lease payments include principal and profit. As for the lease itself, where does the Italy government fit into the equation as this is a G2G deal. What is Leonardo required to provide as part of the O&M requirements. Is there a buy option at the end. Those are more important questions – in my opinion to understand the cost and I would like PAC to have a look. Remember, the local company requirement is an affirmative action policy – are you ok with removing such a policy for defense contracts? I don’t like leasing but I understand the logic. Did the govt overpay? Of course as that’s the cost of doing business in Malaysia – must protect protect “local” company, must “membangunkan” local industry. All that is important is will MAF get new helicopters? Yes. Will Polis, MMEA, Bomba get new helicopters? Yes. As to how the govt will fund it? They just did.
Why not just lease AW149 for utility and for CSAR operation just upgrade the current EC725 to CSAR spec. Or the cost to upgrade those heli to pricey?
@Shah
“but have we got all the facts?”
Do you? Petronas is not the Govt even if its a GLC, ultimately it is and still an entity that was profitable. Mind you Petronas do the lease as their not a chopper fleet operator nor have that experience so better to pay money and let other experts do the job. This unlike TUDM, PUTD, MMEA & PDRM where they ARE A CHOPPER USER. What tangible benefits that leasing will bring to them?
@ kel
“the govt borrows from future RMKs to buy the helis, what program will the helicopters take money from?”
Actually helicopter program for TUDM, PDRM, APMM already allocated in RMK12 2021-2025. With additional helicopters for TLDM, BOMBA to be allocated in RMK13 2025-2030. But they are all suddenly cancelled, wonder why???
TUDM allocation – RM2.5 billion for 12 helicopters
https://www.malaysiandefence.com/how-much-is-that-helicopter-in-the-window-part-5/
PDRM allocation
https://www.malaysiandefence.com/new-aircraft-and-helos-for-police-air-wing/
APMM allocation
https://www.malaysiandefence.com/aw189-contract-details-finalised/
There is no need to upgrade the EC725 to CSAR spec as it is already specced as one. They just need the refeuling probe and DA to be full fledged CSAR helicopter.
@ shah
Petronas contract includes everything from pilots, technicians, fuel, everything. Petronas employees just ride the helicopters like taking a bus.
Also flying hours for oil and gas operations are like 4x-6x the flying hours of military operations (which in most days, just standing by). They fly multiple sectors every day, racking thousands of flying hours in a year.
@ marhalim
We need quite a lot of stuff to upgrade the EC725 helicopters to french, thailand or singapore specs
– floor + cockpit armor
– exhaust IR Suppressor
– MAWS (missile approach warning sensor)
– DIRCM (directional IR countermeasures)
– chaff/flare dispensers
– SATCOM BLOS communication
– pintle mounted GPMG
– refueling probe
https://static.thairath.co.th/media/Dtbezn3nNUxytg04Oai6xL1Hp5cNoIfD11YKTpMPDOBcW6.jpg
Joe “This unlike TUDM, PUTD, MMEA & PDRM where they ARE A CHOPPER USER. What tangible benefits that leasing will bring to them?”
As azlan like to say in regards to expanding PUTD just because they have the staff to maintain and operate their current fleet doesn’t mean they have the staff to operate and maintain more.
One can’t really go on adding on asset without increasing the OE. Additional chopper would mean additional staff. Also just because the current staff are licensed and have the tool and spares to maintain one type of chopper, they are licensed and have all the tool and spares to operate a different kind of chopper. It’s a not a bengkel bawah pokok ceri kind of thing. Not to mention gov staff are more expansive to acquire but usually with lower productivity then the private sectors.
Also note that if the decision to procure is given to each individual agencies, you’ll will end up with all kind of chopper under the sun because little nepoleon do what little nopeleon does thus the country as a whole would never benefit from standardisation and economic of scale.
Is leasing expansive? Well all debt are expansive what more when one acquire debt but doesn’t want it to be called a debt.
” One can’t really go on adding on asset without increasing the OE ”
Right now with the helicopter lease, the OE will DECREASE by RM1.12 Billion for 15 years. So we lease helicopters but we have no money to fly them??