Monday, May 10, 2010

RM8 BILLION – IS IT WORTH THE SPENDING?

The hefty RM8 billion worth Letter of Intent (LOI) awarded to Deftech for the production of 257 of the 8x8 Infantry Fighting Vehicle (IFV) and other variants by the government recently has come under public scrutiny. The public demands an explanation for such hefty spending, for little is known to the public as to what really constitutes the RM8 billion spending. To the ordinary man on the street, they will just divide 8 billion by 257, and the answer is RM32 million for each IFV. This figure is certainly out of the ordinary; an unbelievable amount.

As a basis of comparison, the British government in 2007 opened to all international 8x8 IFV manufacturers to compete for a 16 billion pound sterling supply of 3,500 vehicles to the British Army. If one were to convert the total costs into RM and divide it by the total number of vehicles, the cost per vehicle would just be around RM22 million i.e. RM10 million cheaper than that offered by Deftech. RM10 million is certainly not RM10 ringgit, and this is where the government need to come out with a comprehensive explanation to appease public skepticism.

I have in an earlier posting argued that an 8x8 IFV is not suited for the Malaysian terrain. My views differed from that of the present army leadership; hence the purchase. But what I do believe is that the army has not given serious thoughts to the practical utilization of this huge monster vehicle in an actual battle situation in the Malaysian environment. Having such a huge and cumbersome vehicle does not mean that it can outperform other armoured vehicle, or has a much superior combat capabilities. This is a false notion, as size of the vehicle is certainly not the primary factor to determine combat superiority.

I am not an armoured trained officer; hence I cannot speak for the armour corps. But I have gone through some military exercises with the Indian Army in armoured warfare while a student at the Indian Staff College. It was difficult enough to deploy the vehicles in a tactical armoured maneuver in the Indian plains, and I think it will be worse in the Malaysian terrain. The emphasis here is in the effective tactical armoured maneuvers, and I do not see such a maneuver anywhere in our terrain. What good if the IFV is strung along the highway in single file formation without the opportunity of utilizing the inherent characteristics of the IFV? May I suggest that students of our staff college be given the opportunity to exercise the deployment of the 8x8 IFV during TEWTs; not just a troop but a regimental deployment in support of a formation? I would also like to suggest that the Armour Corps itself conducts an exercise and to evaluate the practicability in the effective tactical maneuver of such monstrous vehicles. I can bet that the deployment is going to be a major fiasco.

Here, I would also like to raise the issue with regards to awarding Denel of South Africa as the subcontractor for Weapons System Integration and the joint manufacturer of turrets for the IFV. I am told that the IFV will be equipped with the Denel Land System turret incorporating Denel’s Two Man Light Compact Turret 30mm, Denel’s ATGW, and Denel’s Prototype 30mm Cannon; the latter I am told is currently not used by the SA Army, and neither is it used by other armies, for reason that the weapon is believed to have some ‘unresolved problems’.

It was reported that in early November 2009, a team of selected senior army officers had made a quick visit to Denel’s facilities in South Africa, together with the local agent. Upon their return, the team quickly decided to support Denel as the integrator of the weapons system for the 8x8 IFV project. What actually transpired during the visit is not known, but rumours have it that there were some promises of a hefty kickback to a certain senior army officer by the local agent. I hope this isn’t true, but if it does, it calls for some serious rethinking and of necessity, a thorough investigation. Will the Military Police Criminal Investigation Division be willing to start the investigation, or are they toothless to do so?

The question that needs to be asked is what was the purpose of the visit? Was it to observe a weapon shooting demonstration of all the weapon systems earmarked for the project, or was it merely a visit of the facilities, and to be briefed of the systems? If it was merely a briefing and a visit around the facilities, then I would say that the visit was a worthless one. If it was a shooting demonstration, then there must be an evaluation report, and this report must be transparent to others as well. The concern of many is about the Prototype 30mm Cannon which may be a cause of problems later, and will the local agent or the manufacturer be willing to offer a guarantee that the weapon does not cause any problems, and a replacement made at their costs? And most importantly, why was the final decision to offer Denel made in such haste? Wasn’t there an open tender? To those involved in the decision making, it is pointless to hide because everyone knows who represents Denel, and the reason why Denel was selected.

Anyway, one would tend to believe in a rumour that there was a kickback, because the deal was done without inviting tenders to other international bidders. It was an arbitrary decision, so they say. Most would have thought that the 30mm Mk 44 Bushmaster would be the better choice for the 8x8 IFV, as the Turkish version is equipped with the 30mm Mk 44 Bushmaster, a weapon system that is already proven with the Turkish Army. And why was the 30mm Mk 44 Bushmaster not given a chance to be evaluated?

What we do not wish to see is a similar failure in the weapons used in the Scorpion and the Sibmas, or has army failed to learn from past lessons and experience? Hence, a review of the Denel’s Prototype 30mm Cannon by the new army leadership needs serious consideration.

For the billions spend, the army deserves something that will truly improve its fighting prowess. The people will also demand that the money is well spend, as the nation’s defence and security will be in jeopardy if the army is to be equipped with a worthless weapon system. Let not this RM8 billion become another blunder, and blunders in defence acquisition seemed quite in vogue and trendy of late.

Finally, let it be known that it is not the agents to decide what and how the army should be equipped; it is the army’s leadership. And if army fails, it is the leadership that will bear the brunt; not the agents.

Now, may I ask……………is the army leadership willing to accept such blame? And this is also the very reason why I have said all along that the army’s top leadership should avoid being associated or being seen to be associated with local defence agents. The army, and I suppose the same goes for the other two services as well, has assigned committees to study, evaluate and make their professional recommendations on all major equipment purchases. Heed the findings of these professional committees, and the top leadership must never exert the authority or influence in the final decision making. I am made to believe that there was top army leadership influence in the final decision to accept Denel.

CRUSADE AGAINST CORRUPTION

17 comments:

maurice said...

Dato,

All along the requirement was for a 25mm turret for the Cavalry 8x8 AFV.The 25mm turret is available world-wide by turret manufacturers such GDLS (General Dynamic Land System USA), Otto Melara (Italy)and BAE (UK.

For reasons known to the Army leadership alone, the turret requirement was suddenly changed to 30 mm turret.This suits Denel of South Africa very well as they are the only manufacturer for this type of turret.

Questions that need to be asked by the MACC:

1. Have there been a proper study made by the Army leadership for the change of 25mm turret to 30mm turret?
2. Why is that the Armour Directorate suddenly change their mind whilst all along they have have been advocating the 25 mm turret for their 8x8 AFV?
3. What happen to the concept of commonality for ammunition and spare parts requirements to make logistic support less complicated since the Infantry is already using the 25mm turret on the Adnan APCs?

Apparently the 30mm turret is a rare requirement by other Armies.It is interesting to know what motivates the Army leadership to opt for this type of turret.

ArshadRaji said...

Dear Maurice,

Thanks for the useful input. I will ask the questions you have posed to Armr Dte. I hope they can give me a professional answer. Otherwise I will seek other avenues to get the right answer.

FMZam said...

Dear Dato'

Forget about the technicality, forget about the suitability, forget about all feasibility, they just made no sensibility over the possibility of their nitty gritty. The hastiness in this dealing, as I said over and over, is because the main actor is leaving the army and wanna make sure his dealing is sealed as quickly before he sings his swan song in all grandieur.

Ganes said...

I suppose the 8x8 project will consist of 2 component i.e. the platform (vehicle) & the turret. Now I read as though the Government has already 'chosen' the PARS vehicle and the DENEL's LCT 30mm turret as the preferred 8x8 Armoured Cavalry Vehicle. The selection must have been recommended by the User i.e. the Army & in particular the Royal Armoured Corps.
How did the trial & evaluation process proceed to finalize this decision?.
Deftech is the main contractor to do WHAT?.
There are more than 23 models of 8x8 Wheeled Armoured Vehicles in the world. Why the haste in selection or to be adamant onto a model only. Technically 8x8 Wheeled Veh can manovoure almost like a tank in rugged terrain. The choice of choosing an 8x8 maybe appropriate for our Army seeing the tech advances globally.
Now can our def industry has the capacity, capability to manufacture a 8x8 vehicle?. Maybe my understanding is that they will assemble the PARS vehicle on to a DENELs turret.

Capt. Kamal Sanusi said...

Salam Dato'

Welcome back...

I did mention in my previous comments that defend industry is the biggest gold mine in this 1Malaysia.

It just need a simple pen to sign some documents and that's it, you are another millions richer.

Either the army really require or really need the said vehicle should be asked later or never being asked.

I would agree with Ganes that we just simply re-assemble the part which resulted the demo vehicle a.k.a prototype is totally different with the one being delivered to Army which gerenti using a sub-standard material. Trust me!

Another factor to be asked is maintenance. How good after sales service and the cost involved.

F said...

Maurice, the reason a number of armies including Singapore are switching to 30mm auto-cannons is because of the better penetration performance offered by the 30mm calibre. A number of wheeled vehicles are now fitted with applique armour thats provides protection to up to 30mm. The Adnans have all round protection to up to 14.5mm and the MIFVs/KIFVs, 12.7mm. Apart from the 25mm used by the Adnans, the Stormers and Condors have variants fitted with a 20mm Oerlikon.

The concept of commonality went out of the window a long time ago. The RMN has the following calibres currently in service - 76mm, 57mm, 40mm, 20mm and 30mm! The list would be longer but the 100mm guns on the Kasturi class are being removed as part of an upgrade.

Dato, since you mentioned posing the question to friends in the Armour Directorate, could you please ask them if the ERAWA 2 ERA panels on the PT-91M offer protection against kinetic energy penetrators/sabot rounds? I would be very interested in what they have to say.

bambam said...

dear dato,

before we go much more higher with present technology, the leader have to ask themself first what is their responsibilites towards the soldiers, they are the person who fight and follow your orders and whether the soldiers has been equip enough with more high tech individual equiment and apparel? Has the quantity for soldiers equipment in BAT L 117 if i am not mistake has been change and upgrade. Is the equipment to each soldiers is sufficient?

Why not just buy 1/3 of the 8X8 AFV and 2/3 from RM 8 billion to make use to upgrade the soldiers equipment. The soldiers maybe thinking the government spent a lot money in high tech equipment but to the soldiers maybe they have different thinking and thought"

sorry this is in Bahasa Malaysia:

" beli equipment mahal-mahal tapi aku pakai beret pun cap kambing harga RM 8 satu" jadi bayangkan kalau seorang tentera diberikan peralatan atau pakaian yang baik dan mahal sikit" the army should be more proud having soldiers well discipline and well equip and look smart with good quality of equipment and apparel especially for the Infantry guy and follow by the other corps.

After all we are not going for a war, just to show off we have all the latest technolgy but after sometime " jual ikut kati" at Central vehicle Depot..right Dato'.

See for yourself la..what happen to Condor and sibma and Scorpion, seldom see on the ground nowadays, what happen to them, where those days we are very proud of them.

Sorry in Bahasa Malaysia again..sekali air pasang, sekali laut berubah...this same goes to the COA , when the new COA take over something will change but if for the soldiers i dont mind but for personnel requirement ...well let it be..what to do. we see a lot of corruption has been on air..but what about MOD seldom right, if there is also maybe nobody knows. Only Allah knows.

So which one do you prefer the soldiers or the 8 x 8 AFV. To me I prefer the soldiers than the vehicles because in our terrain the better movement is the infantry not the vehicles cos the infantry use 2 feet to move and not chain tyre.

Another thing i want to comment is that we look at the combat boot been supplied to each soldier...OMG it so heavy 'macam batu' just compare with the combat boot used by foreign army, if for example our combat leather boot weight 3 kg , the foreign combat boot weight maybe less than 1 kg the weight of the our combat boot. I dont mind if the government say ' local manufacturer is given priority but why the boots i was told half was imported from 1 country and another half imported from another country and just come into malaysia and assemble it, so does this meant as "local Manufacturer". Look at the combat boot used by the US Army or other foreign country it was so light and more superior in design and confortable and maybe only the top brass use it. I used to go for long march before and supposed to use the half canvas combat boot but during the journey i brought 1pair of combat boot from New Zealand and use it, it makes me move much more faster than the Malaysian made but unfortunately before arriving the last check point i have to change to Malaysian Made if not we might loose some point. But when you have the local manufacturer supposedly these company must have their R & D and propose to the MOD to change to much more lighter and more useful and confortable to be used but nothing happen until now. Just look at the US Army, they have different set of equipment and apparel for specific use not dual or triple or quad use or so called 3 in 1 (only meant for instant coffee or maggi me only) but no the soldiers life.

maurice said...

Bambam,

Sangat setuju dengan apa yang saudara sebutkan itu.

Harap kepimpinan TD yang baru akan memberi dan mengambil tindakan untuk memperbetulkan keadaan yang memalukan.

Bukan nak kata, tengoklah, pakaain kerja (No3) askar pun, saya lihat uniform kawalan keselamatan swasta di Gleneagal Hospital pun lebih smart dari uniform askar.

Pihak KSU perlu bersimpati untuk memberi kerjasama dapatkan peruntukan yang lebih besar untuk pakain/peralatan anggota, supaya boleh beli pakain/peralatan yang lebih berkualiti.

Kalau peruntukan ration bagi Central Kitchen kem askar (kontrak Dato Ibrahim Bedawi, adik kpd Pak Lah) boleh dinaikan ke RM22 dari RM4 setiap hari, megapa pula tak boleh buat dengan elaun pakain?Kan dah ganjil tu?

FMZam said...

Sdr bambam,

I kinda like it with all your splendid argument and I tend to agree that your know your stuff well to talk on technicality. But please before you commit the same error by Percival in defending Malaya against the invading Japanese Imperial Army under Yamashita who thought the same as you in your saying "To me I prefer the soldiers than the vehicles because in our terrain the better movement is the infantry not the vehicles cos the infantry use 2 feet to move and not chain tyre." And Yamashita surprised Percival with speed and mobility using bicycles and above all some tanks and winning all the way to Singapore against a superior Percival's army made only of infantry.

Don't get me wrong I am talking about the Battle of Malaya not the Battle of Malaysia to yet to learn from if any.

komando said...

The combat boot and kepala boot issue has been a long drawn debate for donkey years!

But we do not care a damn!

US and European troops give the highest priority..simple !

WHY ..because with a lousy pair of boots your feet will hurt and that immobilizes you and that is the end of the road for a soldier, just because of a lousy PAIR OF BOOTS!

NO GOOD BOOTS, NO CAN WALK AND NO CAN FIGHT AND NO CAN WIN...SEE WHY THEY ARE DEAD SERIOUS !!!?

MAF THE KEPALA BOOT REMAINS !

WIRA said...

Dato',
This whole affair is about kickbacks and commissions. The high cost simply means a fatter commission and kickback.
Try looking for paper-shredders or for that matter vacuum cleaners in any typical Armed Forces office.
2 common items that one can almost guarantee to find in any home are not that readily available in the MAF. Why?
It is because they cost between RM200 to RM 500 each. Too low for anyone to make much commission.
Imagine if they were to cost RM30,000.00 each.
You can bet every MAF office will have them.
Need we say more?

komando said...

They buy because the next GE-13 needs lots of funding !

In all previous GE's, the trend remains predictable, MINDEF goes for shopping spree and that is it - GE comes !

BN & UMNO need funds to buy off "JUMPING FROGS" ..need to buy off "ORANG KAMPONG"...need to sediakan makan & minum untuk semua perkerja!

Need to produce FLAGS, BUNTINGS, BANNERS, T-SHIRTS, CAPS, GOODY BAGS...THE LIST GOES ON..

Where to get the MONIES --- buy 8x8 wheeled APC's and make 30% of the RM8 Billions and spent it all and WIN the GE-13.

Goodness that amounts to RM2.4 million profit margin!

Akuromeo said...

Sifu

i suggest we bread a million Stallion,, good for our cavalry

me... The Robin Hood..

Sir..
lets command me

WWWddd said...

guys,dont talk nonsense & blindly make such accusation

its not simply just divide 8 billion by 257 which u got the answer of RM32 million for each APC.thats absurd for this case
why?the "divided figure" only can be applied if the APCs are directly purchased from its original manufacturer or licenced version.FYI,for this Deftech PARS, Deftech already purchased the blueprint rights not only the KnowHow stuffs, but also the rights to export it to any country under our own military brand Deftech.Think of it as Proton lah
the RM8billion is the total cost for deftech, not the total costs for Gov to pay, the figure include
1)the purchase of the blueprint & knowHow to totally redesign the PARS from scratch( where Deftech will be the principal to produce it from A-Z -started from raw material)
2)setup cost for new production line for totally new vehicle that will based on PARS--think of it as another setup of Proton factory at Tanjung Malim
they will be customized of 12 differnt purpose vehicle based on PARS
1. Surveillance
2. Signal
3. Command
4. Fitter
5. Recovery
6. Ambulance
7. AENBCRV =ARMORED ENGINEER NUCLEAR BIOLOGICAL AND CHEMICAL RECON VEHICLE.
8. 7.62mm RCWS
9. 25mm one-man turret
10. 120mm mortar
11. ATGW two-man turret
12. 30mm two-man turret


3) the cost include the purchase of electronics for BMS-from Sapura Thales & of course the Denel turret+the cost of purchase of ATGM Ingwe for the turret

to date, the basic version of each PARS only costs RM700K & will hit Rm7mil depends on specs

even the LOI itself stated the figure is for maintenance dan support( includes the purchcase of mechanical & electronic spare parts multiplied for each vehicle) for 20 years or less--much rational compared to cannibalizing parts

plz remember LOI is basically a loose deal(final draft which not finalized) as the first prototype produced from the new production line, will be completed next year


YES IT IS TRUE THAT MOST OF 8x8 is not well suited for malaysia rough terrain, yet 8X8 tests already being conducted by Army themselves especially in hard terrain such as palm plantation & other crazy terrains & out of many 8x8 APCs test units from different manufacturers, only PARS passed all!!!
please check KLSreview for some pics

finally all vehicle will be total of 500+ unit,,, not 257 as 257 itself is initial delivery & at least most of them will be fitted with SPACE ARMOUR

to understand more bout Deftech PARS(based on FNSS), please learn more bout Spore Terrex 1st(based on Ireland design)
-----------------------------------

of course its the biggest goldmine, heck--every military gear should costs million of Dollars if not ringgit even it is purchased by our neghbours & any countries in the world.

Those who dont have the capability to develop their own gears,will of course pours billion of dollar for some "latest" stuffs(yet it will not guarantee to fully working)
1 example is UAE's "latest" AEW&C which cannot detect any approaching Israel warplanes which bombed the nearby nuclear plant located at Iran/Iraq

Another example is warplane Su30MKI(which our MKM is based)-costs a whopping 34mil US dollars(plz dont compare with our MKM, coz it has revamped avionics from Thales & SAAB, removing Israel's Elta & Elbit stuffs as a standard fitting for Su30MKI).Imagine a standard BVR fitted to the Russian Flankers( or even any other US planes), u can get the figures about its approx cost anywhere nowadays

other sos
http://militaryofmalaysia.blogspot.com/2010/04/av-8-ganti-condor-dan-sibmas.html

maurice said...

Dear WWWddd,

If the total cost to Deftech is RM8billion, how much do you think the Govt has to pay Deftech eventually? Less? And where is that money coming from if not from the taxpayers!

Where is the market for the Deftech redesigned 8x8 PARS?

Even with the present soft-skin vehicles Deftech is struggling to get any overseas sale (except Brunei with the 3 Ton Truck) what more with the 8x8 when it is a different ball game altogether.

maurice said...

continue....

And where do you think Deftech is going to get the money to build all those infrastructures and buy the machines?

Don't you think it is morally wrong to use taxpayers money to fund a privately-owned company on projects with no direct benefit to the public at large?

FMZam said...

WWWddd,

From your briefing, my conclusion is as good as anyone, that the 8x8 deal is to create "The Proton of Military Vehicle". But while the Proton's ROI is secured by the local market, the 8x8 will certainly rely on demands from external prospective customers. I ask what is the market potential of this vehicle that the government is so confident of securing a substantial market for the ROI of RM 8 billion?

My guess is, if it is going to be like Proton, the principal who sold it complete with the blueprint must have solved its problem of dumping its unwanted product to the unsuspecting third world country. If it is going to be like Proton, it will be like Proton indeed, or worse still it will be another Steyr.