Mindef explains Eurocopter deal but questions remained

The Ministry of Defense (MOD | Mindef) has clarified the recent Eurocopter deal as being reasonable and executed with proper procedures.

The MOD also highlighted that the tendered prices from Eurocopter is RM1.1 billion instead of the RM2.3 billion (scandal) as alleged by the opposition party. I think the RM1.1 billion price tag is meant is for the basic specification. This announcement will fix the confusion of the price tendered by Eurocopter.

Initially, MalaysiaKini reported that there are four manufacturers participating in the MOD tender, namely, 1) Eurocopter, 2) Kelowna, 3) Sikorsky and 4) Agusta Westland. But, MOD also reported that there are 7 tenders submitted.

Moving on, most observers have the opinion that the procedures of inking the Letter Of Intent (to Eurocopter) is subjective as some party claimed that the document was signed by "junior" officers in the MOD. The people was definitely not happy that a junior officer signed document related to billion ringgit contract.

Secondly, some party raised up the issue of the LOI being hastily sealed without completing the full evaluation process including undergoing free trial (flight test and orientation). The LOI was signed by a mid-ranking official in the ministry and was dated Sept 15 - two days before Najib moved from the Defence Ministry to the Finance Ministry.

We all agreed that the Nuri helicopters are over-aged and overdue for replacement. But the government must be spending prudently and consider the gloomy financial situation today. In addition, we are not going to war, we need helicopters for search and rescue as well as for troops transportation. Eurocopter may have the highest specification but too costly for our current requirement.

More reading:
* Added Oct 21: Why RMAF choose Eurocopter
* Eurocopter!? | Letter from local agent for Kelowna (one of the tenderer for the helicopters - from MalaysiaToday
* Eurocopter Scandal?? - by Anak Bangsa Malaysia
* The Cougar, Why? - From MalaysiaDefence

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From The Star

Mindef explains Eurocopter purchase
By ROYCE CHEAH

PETALING JAYA: The decision to procure helicopters from Eurocopter was done following proper procedures and was not influenced by anyone, Defence Ministry secretary-general Datuk Abu Bakar Abdullah said.

In a statement issued Friday, Abu Bakar said the ministry chose the Eurocopter EC725 because the company had a complete tender offer that obtained the highest marks based on technical evaluation, an offset package while also being at a reasonable price.

“Eurocopter also offered a system that was proven which also fulfilled the army’s specifications,” he said, adding that the Government had no influence on prices that were offered by the company as bidding was done via an international open tender process.

Abu Bakar said the move to replace the Nuri helicopters started when a few Members of Parliament and the public voiced their concern about the performance of the helicopter.

“As a result, the Cabinet made a decision on July 18, 2007 to procure helicopters to replace the Nuri.”

Abu Bakar said the Royal Malaysia Air Force (RMAF) then prepared specification documents for utility helicopters capable of search and rescue that were also capable of being upgraded to combat search and rescue aircraft.

Abu Bakar said on Oct 10, 2007, the Economic Planning Unit approved the decision to buy new helicopters and an international open tender was announced on Nov 7 that year.

“To make it easier for prospective suppliers to put forth their offers, the RMAF held a briefing for them during the Langkawi International Maritime Airshow on Dec 6 and also explained to them that it was important for suppliers to include an offset package.”

Abu Bakar said the tender was closed on Feb 12 this year and at noon the same day the tender committee opened the seven tenders that were received while being witnessed by representatives from companies that had taken part.

The tender offers received were as such:

T521/07/A/001 - £341.88mil (RM2.08bil);
T521/07/A/002 - RM663.1mil;
T521/07/A/003 - €104.6mil (RM494.9mil);
T521/07/A/004 - US$220.5mil (RM777.45mil);
T521/07/A/005 - US$708.3mil; (RM2.49bil);
T521/07/A/006 (Eurocopter) - €233.24mil (RM1.1bil);
T521/07/A/007 - US$348.17mil (RM1.22bil).

“The documents were then split up into three parts for the technical evaluation committee, offset evaluation committee and price evaluation committee to evaluate,” Abu Bakar said.

He said the committees conclusions were tabled at a Tender Board meeting on July 22 and was then forwarded to the Finance Ministry on August 4 and the Defence Ministry received the green light on Sept 3.

“The letter of intention could have been issued at any time after Sept 3 and it was a coincidence that it was issued on Sept 15,” he said.

Abu Bakar said that the RMAF is always up to date with the developments in helicopter technology as its officers attend international expos while RMAF also has complete data and knowledge about the helicopters in the market.

“As such, a physical evaluation of how to operate the helicopters does not need to be done at the facility until it is brought to be discussed by the Tender Board.”