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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13 Comments

  1. Hmmm…a billion pounds Sterling for a couple of 2,500 ton frigates. And we are not having an open tender ….why? It does rather stink of impropriety at MINDEF that they should even br thinking of something this magnitude without even the fig leaf of a tender exercise. Surely the Minister should be livid on behalf of the rakyat that such obscene mark ups are being demanded by BAe, a company that has already substantially benefitted from Malaysian patronage. This too in spite of the obviously excellent relationship he has with them given the various public appearances. What a disappointment it must be for YB that the Brits let him down so badly.

    Why should Sabah Shipyard get the job if there are such concerns as to its ability to deliver? Surely the way forward for local assembly would actually be a tender and evaluation exercise for candidates and a performance bond to cover the project in case of inability to deliver. Pretty much the same process as a commercial vessel tender. Actually I see little benefit in doing the fit out etc. in Malaysia since we have little or none of the sub-cons. Better to spend the ringgits on improving the support and maintenance capabilities to ensure a long and trouble free service in the fleet.

    If political commitments have been made to Sabah, then why not convert them into something that the yard can easily construct and require much less specialist expertise, namely some cheap and cheerful LSTs to haul our stuff around our seas. God knows we need them more than a pair of frigates. Nav radar, locally controlled 30mm guns (please, no new calibres….the RMN is like a catalogue of naval ammunitions) and maybe chaff/flare dispensers.

  2. Unfortunatly, the RMN doesn’t have much choice in the matter. Yet again, MINDEF will be paying an arm and leg for another project. Logic woud dictate the ships being build in Scotland, cheaper and faster, but then again the politicans always have the final say. According to an interview in the NST, a BAE Systems official said that the first ship would be delivered in 2013!! Thats the price to paid so the government and the 3 local defence journals can say ‘Buatan Malaysia’ oleh ‘Anak Tempatan’ in the photo captions of the Batch 2s.

    Whilst agreeing with ‘Malaysian Defence’ that 6 Billion could get the RMN 4 frigates [twice the size and higher operating costs but the payoff would be better seakeeping and longer endurance] I would prefer either 57mm or 76mm calibre for the main gun. The reason many Western navies have gone for a larger calibre like 114mm, 127mm and 155mm is because the naval gunfire support role is an important consideration for them. Plus, most of these navies will be operating in an enviroment where air superiority has already been obtained. The 57mm and 76mm gun have a much higher rate of fire, thus being much more effective than a 114mm or a 127mm for the anti-air role.

  3. For my opinion, MINDEF shoulds produced the same project as NGPV or redesign the NGPV project. Should the first batch of PV will be PV and the other will become Multipurpose Fighting Ships project.

  4. Its not being ungrateful but its business. I believe BAE Systems was so shocked when they heard about building the Batch 2s in Sabah that they quickly come up with the risk cost solution. Like EMN, BAE is waiting for MINDEF to make the decision, to build the ships in the UK or locally.

  5. I think to develop the local industry we should have maintained our focus on the NGPV. An advanced frigate based on the MEKO A100 baseline could have been developed, and we still would have had economies of scale for ease of logistics, etc..

    If the 2 Lekiu class frigates are filling a particular need now to fill a gap, then my vote woud have been to have them built elsewhere for speed.

  6. In fact, how many K130 Corvettes could the money buy us? Or maybe even the Polish Project 621 (if it ever materializes), both based on the MEKO 100.

  7. Indeed if the PV project have been completed on time and without the problems, probably the rest of the 25 ships could have been funded already without us resorting to the F2000 design. Still if they could not agree on the cost of batch 2, there is still a chance for more PV to be built. RMN clearly need more ships within the next five years. The FACs are getting old as does the old Kedah class boats. However, the next project on line is the Kasturi class modernisation of which Bouestead have already been given the Letter of Intent.

  8. Building the Batch 2 ships iin Sabah shipyard will be a waste of time and money and not to mention risk to schedule. All for what ? Are they planning to acquire many more ships of the same type in the near future? if not then why not just concentrate on NGPV as sole skills development project for local shipbuiding industry as Adrian mentions. We simply do not have economies of scale to mess around with Transfer of Technologies projects.
    The NGPV project is THE example of such excesses and yet we seemed to have not learned.

  9. Adrian, what I gather from Boustead officials during LIMA was that they had several proposals on the SLEP and one include the installation of SAM, I believe it was RAM or the SADRAL launcher but due to budgetary constraints at the moment, all guns configuration (57mm and 30mm) was the preferred solution. Since they only signed a Letter of Intent, and not an actual contract, this may change when they start work on the ship soon. Bear in mind the all guns configuration is a cheaper alternative. The SADRAL launcher is also cheaper compared to the RAM. If they really going to put the RAM, I would prefer the Block II version which is capable defeating surface and aerial target as well. The 57mm gun could be deleted if they choose RAM but the admirals seems to like these guns dont they even if their usefulness is limited.

  10. The Kasturis are set up as command vessels and have a really spacious CIC. By chucking all the 80s tech, they should be able to get a pretty nice arrangement.

    I’m assuming that Boustead will retrofit the same STN-Atlas combat system, sensors etc. from the Pahangs.

    They should toss the Crusoet-Loire 100mm and Bofors SAK 57mm to avoid all the integration issues Just install the 76mm OTO Super Rapid in place and go.
    Ditto the crappy Emerlecs. They have always been troublesome. I’m willing to accept the underwhelming OTO Breda 30mm in the interest of commonality and avoidance of integration excuses. There’s going to be plenty enough to plumb in the MM40s.

    The 375mm ASW rocket launcher should be landed and send to the museum along with the other weapons.

    There’s no money for this? Plenty if they chop the Lekiu Batch 2.

    Jeez…..

  11. Funny you should mention the STN-Atlas CMS – according to the Wiki (Not the most authorative source, I know), they will put in the TACTICOS (Thales) CMS – which will bring yet another CMS into the list (I think the Laksamana has IPN-S, the Kedah class uses COSYS 110, and the Lekiu uses the Nautis F – all requiring a diff set of training manuals, etc. I bet the Jebat Batch 2 will come with yet another software system.

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