Longer contracts with Defence Ministry for good local companies

KUALA LUMPUR: Local companies with a good track record with the Defence Ministry will be awarded contracts for a longer period.  

Deputy Prime Minister Datuk Seri Najib Tun Razak said such contracts would allow companies to invest in research and development (R&D) to enhance their services and products. 

“The Government has agreed, for the first time, to award local companies involved in the defence industry with longer contracts. 

“The (5 + 5) contract is unique because it will give the company a longer period of return and time to invest in R&D,” he said, after witnessing a contract signing ceremony between the Defence Ministry and several companies worth RM224.5mil at Defence Services Asia (DSA) 2004 held at Subang Jaya here yesterday. 

DONE DEAL: Najib (centre) witnessing the exchange of documents between Secretary-General Ministry of Defence Datuk Subahan Jasmon and MTU Services Sdn Bhd executive chairman Datuk Mamad Fathil Mahmood. Also with them are Chief of Defence Forces Gen Tan Sri Mohamad Zahidi Zainuddin (hidden behind Subahan) and Deputy Minister of Defence Datuk Zainal Abidin Zain.

Among the agreements signed was one with Zetro Services Sdn Bhd for the supply and maintenance of Royal Malaysian Air Force avionic and electronic equipment. 

Zetro is the first company to be awarded the 5 + 5 contract in the country. 

Najib, who is also Defence Minister, said the new concept of awarding contracts was being implemented because of the high-risk nature of investment in the defence industry. 

“No one will invest in R&D if they are given contracts lasting only one or two years,” he said. 

Asked about the progress of the two Scorpene submarines bought by the Defence Ministry from France in 2003, Najib said the delivery was on schedule with the submarines expected to be ready in 2007 and 2008. 

“The team overseeing the progress of the submarines is already in place in France and Spain,” he said, adding that the Yang di-Pertuan Agung Tuanku Syed Sirajuddin Tuanku Syed Jamalullail would visit the two countries next month.  

On the DSA 2004, which ended yesterday Najib said the large number of exhibitors and quality of the products and services showcased had impressed him. “I am impressed by the systems and the assets brought here to be displayed.”  

Najib said future DSA exhibitions would likely be held at the same venue because of its proximity to Subang airport and completion of the Bukit Lanjan highway soon. 

He said some local defence industry companies were expected to clinch some deals but added that defence was an extremely competitive industry.  

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