17 September 2011

Malaysia Mulls Joint UK Warship Development

17 September 2011

Type 26 FFG (all images : Defense Industry Daily)

KUALA LUMPUR — Malaysia is considering a number of defence joint ventures with the UK including the development of navy ships with BAE Systems, reported The Timesin London today.

The UK paper reported however that the Malaysian government would want assurances that it would be protected from the type of budget overruns that had hit previous BAE projects.

“Malaysia is considering joining Britain in developing a new generation of navy frigates — but only if it is protected from the sort of budget blowouts that have blighted recent BAE projects,” said The Times.

“Brazil, India, Turkey and Australia have expressed interest in helping to develop the Type 26 frigate, or Global Combat Ship, but BAE’s reputation has made other potential partners nervous and Malaysia would want a guarantee that it would not be liable for budget overruns before it signed up.”

It also quoted Grant Rogan, the chief executive of Blenheim Capital, an apparent adviser to the Malaysian government, as saying that the project had been discussed at the ministerial level in Malaysia as a way to both strengthen bilateral relations with the UK and grow the nation’s industrial base but that the Malaysian government will be “very firm on cost control”.

Rogan was also quoted as saying that the Type 26 frigate is just one of a number of potential defence joint ventures that Malaysia is considering with Britain.

According to The Times, BAE Systems had bust its budget for the Royal Navy’s Type 45 destroyers, which entered service three years late while the cost of the six ships increased from £5 billion (RM24.38 billion) to £6.4 billion.

It added that BAE’s Astute nuclear submarine was delivered five years late and its cost increased from £5.2 billion to £6.7 billion

The proposed Type 26, which will weigh up to 6,000 tonnes, is supposed to replace Type 22 and Type 23 frigates and is expected to form the backbone of the UK Navy’s fleet from about 2020.

BAE, together with Turkey’s Nurol, won a contract last year to supply 250 armoured vehicles to Malaysia, in a deal reportedly worth RM1.72 billion.

The company was also reported in July to be bidding for a tender to replace Malaysia’s MiG-29N with its Eurofighter Typhoon.

The Times said that the MiG-29N replacement deal could be worth £2.4 billion.
The UK based BAE Systems is considered Europe’s largest defence contractor and had 2010 sales of about £22.4 billion.

The Malaysian Insider)

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