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Sakmongkol ak 47

Wednesday, 29 October 2008

Off with his Deal!

The Eurocopter deal.


“Off with his head!”

King Richard 111

Richard shouts these words in the tower of London, where he has accused Lord Hastings of plotting to destroy him. Also, at the court convened by Oliver Cromwell, at the trials of King Charles 1, the crowd in the galleries shoured, “ off with his head”.

The government has decided to postpone buying the cougar helicopters.

It had been revealed that Brazil were purchasing 50 Cougars at RM84 million each whereas Malaysia would be buying its units for RM139 million each.

But before anyone gloats that its because of their expose that the government has backed out, examine the facts first.

  1. Its not postponed because one retired captain published his two letters which were full of inconsistencies.
  2. Its not postponed because the price at which Brazil bought differs from that of Malaysia. Brazil may have bought basic units while Malaysia is buying the high end version.
  3. Its not postponed because the deal is beset with irregularities.

Maybe Pak Lah can do a financial reverse engineering here. Cancel this deal and sign a deal in the future to buy the same products. Insist on the same quality and terms of the deal and discover whether there are indeed hidden cost. For all you know, you will be caught in mamak counting the second time syndrome. Very often when sakmongkol is dissatisfied with the mamak ‘counting’ the cost of his nasi kandar and asked on a recount. The second time, its even more expensive than the first.

The reasons for deferment are closer to reality. The government has not enough money. The Petronas revenue since 2003 of RM200 billion has dissipated. The country has limited money in the kitty. It must re-prioritise. Hence, according to the reports in the papers:-

The Eurocopter deal has been deferred until the economy improves, Prime Minister Datuk Seri Abdullah Badawi said today, confirming a Malaysian Insider report.At a press conference at the Ministry of Defence, he said that this was to reallocate funds to projects which could benefit the people directly in the current financial crisis.“At the moment we have decided not to purchase the helicopters so as to allocate funds for other projects. The savings are important due to the economy and financial crisis.“Due to the financial crisis, we need money. We cannot just be borrowing every time we need money. The best thing to do now is reallocate our budget,” Abdullah said.

If one has no money, even RM1 counts. But Sakmongkol wants to know, since the whole world knows that Malaysia had wanted to buy the Cougars and her intentions were undoubtedly relayed to the vendors, can the vendors rely on this legal concept known as Promissory Estoppel? .


Anonymous,  29 October 2008 at 09:50  

ha ha ha, that's my habit too when eating at mamak restaurant. i will ask different mamak when counting the second time. its just for second opinion. the same stuff may differ in price in just a split moment. but it works only when the restaurant is full. otherwise they will have the time to consult each other... the same action applies to buying cougars. when so many countries buying cougars one can quietly mark up the price. when the market is quiet everyone will start talking to each other. how come your price lower than mine?


Anonymous,  29 October 2008 at 09:56  

"If one has no money, even RM1 counts. "
That's true. Thank God for roti canai but you won't be able to afford the teh tarik, at least in KL.
That would be at least RM2.20...

walla 29 October 2008 at 12:11  

Promissory estoppel? Well, that depends whether the promise can be encashed on grounds considered reasonable without a consideration.

The next question is: what constitutes reasonable grounds? If we take the brazilian version of this french persian lynx helicopter to be the base price, then the difference of RM55 million is certainly not peanuts even if we may assume what is offered to our folks will include instrument panels like this:

Why the need for costly sophistication for something that's just to replace the transport and rescue functions of the Nuri, one also asks? And how much will it cost to train the personnel beyond the same training that would have been given to the brazilians?

When you start to ask such questions, a sinking feeling appears from nowhere that makes you want to go out and chase some sarungs instead of dwelling on such irksome and ponderous matters.

The answer may lie elsewhere. It is understood the french have added a sweetener to the deal - they will set up some local jv if the deal goes through. The picture of the hangar that came up on tv two nights ago showed a simple and small warehouse of eurocopter's little outfit here. Some amount of RM150 million was muttered. So, if the deal had been sealed, where would the difference of RM43 million per piece be going?

It's not just about eurocopters. It's about everything. In the past, the method was like camel trading. I give you the contract. You add something into the price and explain it away in the specs. Later it morphed a bit. I buy from you on G2G basis. You caveat that i must get the whole set by giving to your sub-suppliers as well. They add something for me without going it through the you which is the only thing recorded. Later still, it became something else. I give the deal to you. You increase the base market price by saying you will transfer technology. You even come in to set up shop. The cost of the shop will be augmented to accommodate additional costs to be paid to my suppliers arranged to me your people to build that spanking new shop, namely the front part only. The trip to Orlando or the Riviera is to de-stress from all these fatiguing trials and tribulations. The best is the simplest. I give the tender to you. You supply the goods and charge the tendered price. Then someone asks how come we need to buy. I pooh-pooh by saying if we don't buy now, the price will go up later. Whether we need the thing in the first place is a side issue whose questioning should not be made habitual.

The situation is now: eurocopter deal suspended: (a) will we be estopped from cancelling it without recourse to renegotiation on the future price? (b) will the grounding of the Nuri's mean we have no airborne search-n-rescue operations?, and (c) with the government investigate all over again all the past deals that came under that ministry with view to putting a definitive stop to what has put the rakyat to much agitation, considering the money, no small sums, had come from the general pool, and more importantly, lives have been lost defending this country while using vehicles which could have been better maintained if more money had been saved, or replaced if - well - more money had also been saved.

None of our military folks must be put in harm's way on any ground of obsolete or sub-maintained equipment. How does one explain to the widows and the fatherless who stood there at the padang in GHKL when they brought the bodies back?

On that score, one should also look the other way if retired captains stretch the truth somewhat in their eagerness to bring to public awareness what could have been a highly tainted deal, if only to draw attention that such things might have been happening for too long at great cost not only to the treasury but also to the lives of our wira's. At stake is that simplest of things. Something called conscience.

Sorry for the tone. I was special forces.

Ah, now may i be excused? A sarung has just floated by the window....

ajipp 29 October 2008 at 12:26  

why dont the gov buy the basic unit like brazil? do we really need the full spec of eurocopter?

then problem solved

or maybe the kroni wants more profit with extra spec...hmmmm

Anonymous,  29 October 2008 at 19:24  

Malaysia boleh.... LOL

A small country buying the best in the world and equipped to the tilt.
...and with the price doubling etc.

Good way to govern Malaysia.
We are super rich.... dont worry lots more oil and timber to exploit to the full before these dry out.

Then every one for himself.

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