Defence equipment: Are we getting value for money?

The government has to answer to the people whether taxpayers are getting value for money in the purchases of defence equipment.

This follows the Sultan of Johor's concern over exorbitant purchase of Rapid Intervention Vehicles (RIV) for the Special Forces, DAP national publicity secretary Tony Pua said today.

Pua notedthe call by Sultan Ibrahim Ismail (right) that nobody should take advantage of the Defence Ministry's purchase of the RIVs for RM2.76 million, or RM690,000 each, for personal gain.

"The reprimand by the sultan on the acquisition of the RIVs at an exorbitant cost highlights the malaise in the Defence Ministry's procurement exercises.

"In 2008, the ministry acquired 12 Eurocopter Cougar EC725 for RM2.3 billion or RM193 million each despite the same being acquired for RM82.8 million each by the Brazilian government."

"Last year, the ministry awarded a RM6 billion contract to Boustead Naval Shipyard to build six offshore patrol vessels, and a RM7.55 billion contract to DRB Hicom Bhd for the purchase of 257 units of 8x8 Armoured Personnel Carriers (APCs).

"These series of controversial procurements of defence vessels and vehicles have raised major question marks as to whether the taxpayers are getting value for their money," Pua added

Two days ago, after the Johor ruler expressed his concern, Defence Minister Ahmad Zahid Hamidi said the ministry would probe the discrepancy in the purchase price. 

Sultan Ibrahim in questioning the government expenditure also displayed his own RIV vehicle that he purchased for RM150,000.

"Which of these will be your choice? I do not understand why government purchases involve exorbitant charges that do not make sense," Sultan Ibrahim, who is also a colonel in the Special Forces, was quoted as saying.

Pua: Vessels merely renamed

Pua who is also Petaling Jaya Utara MP, further noted that the cost of the naval vessel construction job given to Boustead had subsequently been inflated to RM9 billion.

Ahmad Zahid brushed this off, saying the cost increase was because state-of-the-art "littoral combatant ships" were being acquired.

Pua said: "It was subsequently exposed that the ministry had merely 'renamed' the German-made Gowind Class naval vessels as littoral combatant ships, which is the name for the more technologically advanced ships built for the United States.

"We can only interpret that the 'renaming' of the ships was done to mislead the people into believing that we were indeed acquiring the best-in-class naval ships with the RM9 billion contract."

The DAP lawmaker also said that in the purchase of the 257 APCs from DRB-Hicom, it was revealed that the company was acquiring the APCs from a Turkish defence contractor for RM1.7 billion.

"While DRB-Hicom will still need to instal certain optional equipment, such as the turret guns and software systems on the APCs, it is beyond reasonable belief that such additional 'customisation' will cause the bill to be inflated from RM1.7 billion to RM7.55 billion; or from an average of RM6.6 million to RM29.4 million for one vehicle."

Accused of being a foreign spy 

When the above controversies were exposed, Pua said he was accused by Ahmad Zahid as a "foreign spy seeking to expose national defence secrets and was criticised as being ill-informed about defence technology.

"However, when the critique comes from the Sultan of Johor, the minister has no choice but to concede that an investigation would be made into the glaring financial irregularity.

"We call upon all of the above deals to be investigated and scrutinised not by the Ministry of Defence but by an independent Parliamentary Oversight Committee. Malaysians have no faith that the ministry will conduct a fair and above-board investigation."

In light of the transparency touted under the Government Transformation Programme, Pua said, it was crucial that the Defence Ministry supported the setting up of an oversight committee to prove that all its purchases are above board.

"After all, if all these transactions are of value for money to the government, then surely there is nothing to hide from an independent panel," he emphasised.