25 November 2009

Cougar Deal Buzz

25 November 2009

THE COUGAR: The deal to buy this Eurocopter is likely to be signed next week (photo : Flightglobal)

THE local defence industry is abuzz with speculation that the procurement of the Eurocopter EC725 Cougar medium-utility helicopters will be inked at the Langkawi International Maritime and Aerospace 2009 (Lima 2009), in Langkawi next week.

The Defence Ministry has remained tight-lipped on speculation about the RM1.604 billion deal, nixed last year by then Prime Minister and Defence Minister Datuk Seri Abdullah Ahmad Badawi due to the global economic crisis.

Defence Minister Datuk Seri Dr Ahmad Zahid Hamidi, when contacted by Malay Mail, declined to confirm or deny speculation that the government will sign a Letter of Acceptance (LOA) with Eurocopter Malaysia Sdn Bhd, the Malaysian-based subsidiary of the pan-European helicopter manufacturer, Eurocopter.

He also dismissed reports by the Indonesian media that the Malaysian government had agreed to purchase some 30 Panser Pindad APS-3 armoured personnel carriers developed by the republic's State-owned arms maker, PT Pindad.

Ahmad Zahid said the ministry was only conducting an evaluation of the Panser as part of its planned purchase of APCs for the Malaysian contingent in Lebanon and the Army’s wheeled APCs requirements.“We have not concluded the deal,” he said.

Malay Mail was informed that the government was concluding its negotiations with Renault Defence Trucks of France for the procurement of the Vehicule de l’Avant Binde (VAB) — a French-designed APC — for the Lebanon mission.

Malay Mail was further informed that French Defence Minister Herve Morin was expected in Langkawi to witness the signing of the LOA.

Another deal expected to be signed at the Lima show is the RM500 million for the Intergrated In-Service Support agreement with the government and Boustead DCNS Naval Corporation Sdn Bhd for the maintenance and support of the two Tunku Abdul Rahman class submarines purchased from DCNS and Izar.

French embassy officials in Kuala Lumpur, when contacted, also declined to comment on the issue. But they confirmed that Morin was expected to be in Langkawi for Lima 2009.

Local defence analyst Benjamin Mahmud said he had also heard the speculation which he described as “good news”. He, however, said he was not “totally” convinced that the Cougar deal would be finalised at Lima 2009.

“I heard the same thing, the good news. But even I am not 100 per cent sure it will happen. Some are saying that the government and Eurocopter will only sign an extension to the Letter of Intent (LOI), which was issued to Eurocopter Malaysia when the ministry decided to procure the Cougar for the Nuri replacement programme.”

If indeed the speculated signing is for the extension of the LOI, he did not expect the procurement to be finalised within the next two years.

After the deal was suspended, the government and Eurocopter signed an extension agreement to guarantee that the price of the Cougars will be fixed at RM1.604 billion as when the original LOI was issued.

Another extension to the LOI was signed in June during the Paris Air Show. It is expected to expire next year.Meanwhile, due to operational commitments, the French Air Force was unable to sent a Cougar to be displayed at this year's show. The Cougar was at the previous Lima show two years ago.

The Cougar saga began when the Cabinet decided that the Nuri helicopters operated by the Royal Malaysian Air Force (RMAF) should be replaced, following a fatal crash near Genting Sempah near Genting Highlands on July 13, 2007.

The Nuri replacement programme (NRO) tender was floated in the search for 12 medium-utility helicopters to be delivered to RMAF, starting in 2010.

Four helicopters — namely the Cougar, Agusta-Westland AW101; Mil Mi-17 and the Sikorsky S-92 — were offered to fulfil the requirement.

RMAF operates some 30 Nuri helicopters and ministry officials have cited on various occasions that the helicopters would remain in service until 2015.

On Sept 26 last year, Abdullah announced that the ministry had chosen the Cougar to meet the NRP — and the LOI had been issued to Eurocopter Malaysia.

The announcement created a big controversy, with the Opposition charging that the deal was highly irregular.

They also claimed that Malaysia was paying a much higher price for the Cougars compared with the deal obtained by Brazil.

Several reports were also lodged with the Malaysian Anti-Corruption Commission, citing irregularities in the award of the LOI. One of the notable complaints was made by the local agent for the Mi-17 helicopters, a former Umno politician who has since crossed over to the Opposition.


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