KUALA LUMPUR: Leasing helicopters will ensure the country will obtain defence assets faster compared to purchasing them and is also more financially viable, says Defence Minister Datuk Seri Khaled Nordin.
"If we insist on only acquiring assets through direct purchasing, it is not impossible that we will have to wait a long time or may actually never be able to own the strategic assets needed by the country.
"On the other hand, if we choose the leasing approach, the government will not need to pay an advance, or make progress payments, or incur capital expenditure," he said during his ministerial winding up speech of the motion of thanks of the royal address in the Dewan Rakyat on Thursday (Feb 20).
The government had faced criticism for its decision to lease 28 helicopters under a RM16.5bil contract.
Khaled also said that the government would only start paying its financial commitments when they receive the helicopters.
"Moreover, these payments will be made monthly, spread over a period of 15 years.
"If we were to purchase these assets outright, we would need to start incurring costs and make payments now, even though we have not yet received them," he said.
He added that by leasing, the government could acquire high-cost, sophisticated and modern assets without upfront payment.
He explained that the readiness level of aircraft owned by the Air Force between 2011 and 2015 was not optimal and did not meet set standards as shown in a Universiti Teknologi Malaysia study in 2017.
"The study found that the readiness level then was only 43%, compared to the minimum requirement of 70%.
"Furthermore, agencies like the Police and the Malaysia Fire and Rescue Department also face the same issues due to inefficient maintenance, repair processes and accidents or severe damage (beyond economic repair)," he said.
He said by leasing, the minimum readiness of the helicopters would be at least 85% at all times.
Previously, several MPs questioned the decision by the government to lease as opposed to outright purchasing, claiming that it would cost more.
However, Khaled said that based on the cost-benefit analysis simulation conducted by the Public-Private Partnership Unit (Ukas), the net present value for this lease can provide savings of between 15% to 25% compared to a direct purchase.
