THE current controversy surrounding the purchase of six littoral combat ships (LCS), which is burning RM11bil of taxpayers’ hard-earned money, isn’t the first discrepancy and alleged corruption, incompetence and mismanagement involving the Defence Ministry (Mindef).
In the name of national interest, details relating to procurement are often sh rouded in secrecy, with information branded classified.
Last week, the government announced that it plans to set up a Royal Commission of Inquiry to investigate the LCS issue, which has now been presented to the Cabinet.
It’s certainly a good follow-up to the detailed findings by the Public Accounts Committee (PAC) and the de-classification of a report which highlighted the poor financial management and cash flow issues ailing Boustead Naval Shipyard (BNS), the company embroiled in the LCS fiasco.
Hopefully, the setting up of the RCI will expose Mindef’s shortcomings and reveal it to the public while establishing a proper procurement process.
The RCI shouldn’t be another panel with a glorified name which delays its deliberation and has its report collecting dust at the end of it.
The Malaysian Anti-Corruption Commission (MACC) has already stepped in, and Malaysians want to see the case expedited with the Attorney General hauling up the culprits responsible for the inflated costs.
This could include powerful political personalities who directed those implicated in the PAC report.
The sad reality is that the LCS issue is yet another shameful blot on Mindef’s long and never-ending series of scandals over the last 40 years.
Before we pore over its “chequered” history of the past decades, fresh in my mind is the 2019 news reports of the non-delivery of six helicopters worth RM300mil that were ordered in 2015.
Bernama had reported that a Mindef representative filed a complaint at MACC, saying the McDonnell Douglas MD530G lightweight combat helicopters were to be handed to Malaysia in 2017 and 2018.
It reported, quoting sources, that approval for the November 2015 purchase of the helicopters was not done according to procedures, with the government’s interests not properly protected.
The source told Bernama that the Malaysian government had paid up RM112.65mil for the acquisition, or 35% of the total cost.
We haven’t heard from MACC since 2019, when it said it was investigating 14 controversial land swap deals involving Mindef.
The list of dodgy procurement deals is long. It includes the 1981 purchase of 26 units of the British Alvis Scorpion tanks.
According to Consumer Association of Penang president, Mohideen Abdul Kader, the tank’s recommended Rolls-Royce gasoline engines were replaced with slower diesel ones, and the guns with heavier ones.
He said the modifications made the tanks heavier and slower, a sitting duck in any military encounter, and eventually in 2018, they were scrapped.
“The 186 SIBMAS armoured personnel carriers purchased by Malaysia in 1983 were found to lack combat effectiveness.
“Malaysia bought 18 Russian Sukhoi Su-30MKM Air Superiority Fighters, taking delivery of three in 2007 and the rest in 2009.
He said the deal, worth RM3.2bil, was made through a Russian state company whose local agent was paid 12% of the purchase price, amounting to RM380mil.
Mohideen said by 2018, most of them had become unserviceable, with only four of the 18 fighter jets still able to fly. The rest were under repair and the ministry eventually fired the contractor, apparently for failing to maintain the jets in airworthy condition.
“In 2002, the ministry negotiated through a Kuala Lumpur-based local company Perimekar Sdn Bhd to buy two Scorpene submarines and a used Agosta submarine produced by the French government at the price of RM4.5bil.”
Mohideen said a whopping commission of RM510mil was paid, 11% of the purchase price of the submarines.
He also claimed that in 2004, the PSC-Naval Dockyard was contracted to deliver six patrol boats to the Malaysian Navy, but only two were delivered in 2006, neither of which were fully operational.
He said by 2007, the original cost of RM5.35bil ballooned to RM6.7bil, a 26% increase.
Mohideen said the auditor general reported that the ministry had paid RM4.26bil, although only RM2.87bil worth of work had been completed, implying an overpayment of 48%. He said the Cabinet also waived late penalties of RM214mil.
A comprehensive list can’t be contained within this space because, sadly, it’s never-ending.
To take consolation, similar malpractices are reported all over the world.
Dr Zia Ul Haque Shamsi’s report on July 19, 2021, described India as having the most corruption scandals when it comes to buying arms and equipment.
He said India was plagued with scandals of military transactions despite stringent and painstaking bureaucratic processes for the approvals of defence procurements.
It will only be a matter of time before similar specialist writers on defence use Malaysia as a case study, especially when our approval process can hardly be described as rigorous.
As lawyer Mohideen rightly said, “the incestuous relationship between politically connected local agents of foreign arms manufacturers and the ministry must be ended.”
Enough is enough. It’s time we clean up our act and stop the country being looted through Mindef.
Wong Chun Wai
Wong Chun Wai began his career as a journalist in Penang, and has served The Star for over 35 years in various capacities and roles. He is now group editorial and corporate affairs adviser to the group, after having served as group managing director/chief executive officer. On The Beat made its debut on Feb 23 1997 and Chun Wai has penned the column weekly without a break, except for the occasional press holiday when the paper was not published. In May 2011, a compilation of selected articles of On The Beat was published as a book and launched in conjunction with his 50th birthday. Chun Wai also comments on current issues in The Star.