Poll Result, Jebat Batch 2 and RM6 billion

Jebat Batch 2 Mock-Up

KUALA LUMPUR: If you have been reading MalaysianDefence Dot Com for a while, you would noticed the polls posted on the right hand side of the page. The latest poll asked your opinion on whether or not it will better for us to build ships locally even if its more costlier as we need the expertise.

Well most of you think that we need the expertise to build naval ships whatever the cost maybe. For me the opposite is the answer. Yes, we need the expertise but if we can get more ships by building them overseas why not? We can always get local engineers and ship workers to be sent there (where ever the shipyard is located) as contract workers with the shipbuilders (paid the same amount as the local workers there of course), so we can get the expertise needed for future projects.

It is certainly cheaper in the long run compared to having to fund a local shipyard for many years just to ensure that no one is retrenched after a project was completed (as was nearly the case for the former Naval Dockyard Sdn Bhd which has now been transformed into Bouestead Heavy Engineering Sdn Bhd). Without state funds (through Lembaga Tabung Angkatan Tentera) the dockyard would have collapsed and the workers and the sub-contractors would have been left out in the cold.

Of course, if the project was given to a more trusty worthy crony this would not had happened so fast but realistically how long would have the shipyard survive without a government project? Not long I believe.

To be honest, there are too many shipyards in the country, every state want to have one although viable projects are limited even in the more lucrative and numerous oil and gas industry. Now the defence budget is being used to prop up another unprofitable venture, Sabah Shipyard, in this case through the Jebat Batch 2 project.

What ever cost you might say? In this case, its almost RM6 billion. Yes, you saw and read it right. Thats how much BAE Systems is asking for the two ships. Actually both ships will only cost around RM1.5 billion each but fearing the risk that having the ships build locally and in Sabah, the good ole boys of BAE Systems is asking another RM1.5 billion each just to ensure that if the boats are delivered late, their profit margin remains. That is the reason for the delay in confirming the project, the Malaysian govt is baulking at the high markups.

For RM6 billion we could get FOUR batch 2 instead of the measly two on the cards. For RM6 billion we could get TWO destroyers with Aster30/15 and 114 mm guns instead of the measly 57mm and Seawolf and ESSM. That is the reason I am against building the two ships locally especially at the price offered by even by BAE. Even if BAE lower the amount to RM2 billion each if the Govt will agree to have the ships built in a dockyard in the peninsula as the RMN had proposed as a solution to the stand-off, it is still too expensive.

You cannot blame BAE Systems of course, they are simply businessmen first. Looked what happened to the Yarrow shipyard, the original builder of the Jebat and Lekiu. You must remember also what happened to Bae Systems reputation after Brunei refused to take delivery of the 3 (?) Nakhoda Ragam corvettes.

What is the RMN thinking about this? They actually believed that the ships could be built locally, which at least would reduce the cost of the project to around RM4 billion, which to me is still too expensive.

Anyway, to those voted Malaysian Defence says thank you. For those who voted in favour of building naval ships locally, you could be right also but I believed we need to cut down the number of shipyards first before the local ship building industry could move further, I know we got good people, its just at this moment in time, the industry is too fragmented to be profitable in the long term.

Malaysian Defence

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