Wednesday, 9 February 2011
The defense ministry's allocation of a RM 6 billion budget to build 6 Littoral Combat Ships (LCS) has raised some controversies. The DAP's economic czar, Tony Pua has raised some reservations about the budget allocation. He calls for more transparency and straightforwardness in the defense contracts. The ships will be built by Boustead Naval Shipyard which is a subsidiary of LTAT.
Pua's comments have stirred up a chorus of accusations that MINDEF may be over spending. It has also invited a rebuttal from a writer with a weekly defense journal. A blogger who has a hobby reading up on any military hardware and technology has also responded to Pua's comments.
Pua may have fouled up in his comparisons. But I am ready to concede in this case, facts are not that very important- the meaning and reading into the meaning of the contracts are. Pua's comments were meant to raise awareness about the possibilities of shady deals and deals that will later turned bad.
Consider the record. The ships built by Amin Shah are probably better employed as deep sea fishing vessels now. We bought submarines that had difficulties in submerging. We have airplanes mothballed in the desert in America. We have had magee mee and screw drivers sold to MINDEF at extortion exorbitantly inflated prices.
So when MINDEF makes public its allocation on any project, any right thinking people will stand up.
So I will not denigrate Pua's concerns too much. It has everything to do with financial discipline and financial good governance.
That aside, my main concern is the RM 6 billion sufficient at all to build 6 LCS such as that commissioned by the US Navy?
Usually in any defense contracts, technical teams from MINDEF will be working closely with contractors. Granted that in itself is no guarantee that ships will be built to specifications. That is also no guarantee that the ships built will be operational even.
The ships infamously built and contracted to Amin Shah have not been operational and have been plagued with all sorts of technical deficiencies. So I wouldn't place too high a premium, even if experts from MINDEF were to sit and hold hands with the contractors. Probably they will do that in karaoke bars and over some beer mugs.
Normally I would relish tearing into the contracts to see whether there are any possibilities of grossly inflated numbers which can only mean one thing:- money and commissions passing hands.
I am more interested in the reasoning given by the Minister of Defense. His remarks hardly inspire confidence in our defense capabilities.
Out of the RM 6 billion allocation, 2 billion will be allocated to vendors. The minister says he will monitor to see that vendors are paid. Hello? Are we missing something here? His role is not to oversee that vendors get paid- there will be a committee doing that. Unless the vendors are UMNO contractors mostly from Perak who will be campaigning for Zahid, his primary duty is to see the second generation patrol vessels are built according to technical specifications and will be delivered on time. More important his duty is to ensure there are enough funds to build such an LCS. The US Navy for example is spending around USD600-700 million per vessel.
So in the end, if you under-build, what will the vessels be employed for? To provide escort services for our fishing vessels?