RMAF and Assets…Edited

* It had come to my attention that the figures cited below is incorrect in context to the theme of the discussion.
The US$233 mentioned below is only for the initial contract. The whole contract for the 24 Electric Jets is actually US$2.4 billion. It is for that reason I had deleted the 3rd Para..

KUALA LUMPUR: Another example how much money other people spent for their air force.

Lockheed Martin Corp., Lockheed Martin Aeronautical Systems Co., of Fort Worth Texas, is being awarded a firm fixed price contract not to exceed $233.6 million. This action will provide for twenty-four F-16 Block 52 aircraft, along with associated support equipment, alternate mission equipment and support elements for the Government of Morocco. This effort will support foreign military sales to the Government of Morocco. At this time $124.3 million has been obligated. 312AESG/PK, Wright-Patterson AFB, Ohio, is the contracting activity (FA8615-08-C-6050).

As we celebrate RMAF 50th year anniversary one have to wonder how much money will be wasted still…

Malaysian Defence

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About Marhalim Abas 1626 Articles
Shah Alam

17 Comments

  1. You’re right. How much did we spend for our Sukhoi? US900 million. That’s exclude the weapon package as long as i could recall my memory since the government has yet to decide the BVR missile for our flankers. All we have are WVR missiles similar to our MiG. Its like having Saga engine in Ferrari car. We have a descent fighters but we have yet to exploit the true potential.

  2. Dear Sir,

    There are major differences in the capability of the Viper F-16 Block 52 offered by the US Government to the Government of Morrocco. The comparison that you made betwen the Malaysian Government purchase of the Su 30 MKM and the Moroco deal canot be take on equal basis. As you may well be aware that weapon is not on the price list, foregoing the F-16 capability to be armed with AIM-120 AMRAAM and Paveway II/III kits which totally reduces the aircraft operational software and sensors onboard.

    This significantly reduces the aircraft price. An aproximate purchase of F-16 Block 52 by the Greek cost them about USD 40 Mllion each. But at this price, the US Government is offering at an aprroximate of USD 200 million for the aircraft package, each of the viper will cost USD 8.33 million. These is too low price for an F-16, unless these aircraft are retrofitted from US old F-16 from Block C/D and upgraded to Block 52. Surplus aircraft.

  3. One must remember that the requirement for 72 fighters is the minimum number. So far we have around 40 to 50 fighters and the numbers that are actually available daily are usually lower than the book figure.

    So buying 18 more jets thats cost more than half of the annual budget does not look too bright to me.

  4. Since budget is a constraint for a small country like us, all the more reason for us to shop around for more value deals like MLU upgraded 2nd hand Vipers or even Gripens. Another interesting possibility is buying low houred 2nd hand Swiss F5Es which were on the market and doing significant upgrades on radar and avionics like what Singapore, Chile and Brazil have on their F5s. This will give us the numbers required for minimum deterrence capability instead of wasting huge amounts of $$ on a realtively small fleet of top end fighters only.

  5. The real reason why we don’t buy US supplied fighters and other stuff is because FMS caps any commissions at 2.5% and Foreign Corrupt Practices Act (FCPA) makes it a federal felony to fill suitcases with cash for distribution. The Russians and French as much more understanding in this regard as are the British. In fact BAe is presently being investigated for their ‘slush fund’ used to pay kickbacks in Saudi.

    Ignore the Mahathir era posturing. We do not buy American because it does not serve ‘the national interest’. The M4s are an anomaly that resulted from the botched AUG A3 ‘deal’. They are a commercial contract and not a FMS sale.

    Indeed I do not believe ANY major equipment purchase has gone out to tender for quite a long time.

    Simon

  6. Maybe the government will increase annual budget for defence since they claimed by increasing the fuel price will save Billions of Ringgit that were used for petrol subsidy that could have been spent for other more important sectors for national development. I hope they will channel a portion of that amount to improve our defence capabilities such as M-SAM to improve our air defence and as realization to provide layer air defence, Well there are a lot more we need to improve especially our aging navy. As a littoral country that are divided by South China Sea, we should have had a strong navy.

  7. if we look closely that our jets includes the thales system,laser pod ew n such avionics which costs a lot,
    and also for the su-30 model that have head-up display.
    i think that the price stated above does not iclude the avionics and such.surely they marked up the price.and also, might be these bunch were the stok lame..where now they r using f-22.

  8. I would venture to guess thats the best way to overcome the mess, is for tight control (financially and everything else) first and after looking at the requirements adding more more money to the defence budget but not to the point of bankrupting our nation.

  9. Dear Sir,

    I’m curios on MeesterT comment that the FMS caps any commission at 2.5%. Can you helped me elaborate?

  10. Based on Industrial Defence Daily website, http://www.defenseindustrydaily.com/.

    This is what Pakistan going to pay for their F-16 by using FMS. Average down to US83 million a piece. Why the different is soo huge? Morrocco getting surplus F-16s and later upgraded? Pakistani’s F-16s will be similar to what offered to the Israeli to explain on high price tag?

    Item 1: 36 New F-16 Block 50/52s – $3 billion
    Item 2: Weapons for the New F-16s – $650 Million

    Well…to me, its way cheaper to get our top of the line SU-30s than these brand new F-16s.

  11. If you know of a higher FMS commission cap, I am all ears and have a few people who would want to know about it. FMS is essentially a G2G arrangement but recognizes the fact that stuff doesn’t sell itself. FMS = Foreign Military Sales, i.e. US equipment sold by the US Govt. as opposed to pure commercial contracts. Typically major systems are usually FMS.

  12. ” The whole contract for the 24 Electric Jets is actually US$2.4 billion. ” which comes down to US100 million a piece for the F-16 and considered a ‘very wise’ decision by general populations.

    Yet, we are called ‘stupids and morons’ for spending US900 for 18 SU-30s. Go figures…

  13. Thank you Meester T. From personal experience you get zilch from FMS but I’ll let you know once the fund is comiited the FMS managers can play with items sold, change orders and account credited. Due to very very strict US laws on Military Equipment now on ITAR, companies are require to disclose all related payment including commissions. As you may all aware must of Major Military Equipment Manufacturer are NYSE listed thus their accounts are scrutinized by many interested parties including NGO’s and lobbyist. I have seen trends of these Companies appointing Consultants in the potential customer’s countries instead of the usual Commission Agents. The only avenue to get Huge Fallout is to play with the Counter Trade Activities as this does not involve Military Equipments.

  14. Naz, the problem with the Sukhoi deal is now we have four fighter types to take care. Since we cannot afford to get the minimum fighters required by the air force spending USD900 million on the purchase and another USD300-400 on the weapons and most probably around USD100 million a year to keep all the fighters flying means that the whole deal is not cost effective in the long run.

    ShahF,
    Ironically, the Romanians are also buying 24 second hand Falcons with the same equipment fit as the Moroccans but the deal is listed at USD4.5 billion. If one wants to make money from any deal, there is always a way to do it…

  15. To me, Su-30s is the best buy for RMAF instead of having additional MIG-29s, (which have less than 50% air readiness all the time), striped down F-18 E/Fs and jet fighter wannabe Hawks. Hope additional SU-30s will be added to increase the numbers and streamlining maintenance and spares.

    In case there is a switch and a new Federal govt being formed, hope they will continue of having additional SU-30s as our main fighters. We will be a real bunch of stupids and morons if there is another model switch in the futures regardless of who in power.

  16. a side info on these plane deals. An rmaf personnel (so I heard 😉 ) voiced out a frustration experienced by the air force regarding these deals. Rather than given the instruction “Go buy from this country, choose aircraft based on your evaluation”, they were forced with the instruction ” Buy these planes from this country”. See the difference?

    So I heardlah.. coffee talk you know… 😉 Discussing the practicality of having various types of aircraft that we have is a useless venture, as well as discussing where all those $$ really go. Eye candy, IMHO.

    Marhalim: We need to discuss the issues otherwise those in power or those who want to be in power will think that they can always do as they please. I understand that we may never change the world but at least we try. If we manage to convert one person to think about the nation first instead of himself, I am happy…

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