PAC urged to pore over Eurocoter deal

PEKAN: The Public Accounts Committee (PAC) is free to initiate an inquiry into the Defence Ministry’s decision to procure helicopters from German-French firm Eurocopter.Deputy Prime Minister Datuk Seri Najib Tun Razak said the Cabinet, at its meeting on Friday, had approved his motion that the matter be scrutinised by the committee.

He said the ministry’s secretary-general, Datuk Abu Bakar Abdullah, had already issued a public statement on the processes which were said to be in accordance with tender procedures and devoid of external influence.

“However, the matter should be studied in detail by PAC and it can hold a hearing in order to make a conclusion over what has happened.

“I had suggested this and it was accepted, I hope the PAC will start to work on it,” he told reporters during a Hari Raya open house yesterday.

Earlier this month, Mentari Services Sdn Bhd chairman Capt (Rtd) Zahar Hashim alleged the tender accepted during Najib’s tenure as Defence Minister to replace the ageing Nuri helicopters was “too costly.”

He claimed the Government could have saved almost RM1.5bil if it had bought the Kazan-M172 helicopters from Kelowna Flight­craft Ltd, a firm he represents.

He said the Kazan-M172 met all the specifications required by the armed forces and costs RM898mil while the Cougar EC-725 would cost the Government RM2.3bil.

Sourced from the Star.

[Bold emphasis is mine]

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Why is NTR seemimgly avoiding to address the matter of the large valuation differential between the ‘inflated’ cost as alleged by Mentari (RM 2.317 billion) and the recent disclosure by Mindef (RM 1.120 billion)?

We are all aware of the price difference between the EC725 and the Mi172 helicopters (as outlined in the last para of the Star report above) and I’d assume, so would NTR. Similarly, the decision to issue an LOI on 15th September ’08 in favor of the EC725 may have followed proper evaluation processes. Hence, NTR appears to be duplicitous for the sake of saying something without explaining!

By now, NTR would have also known about Mindef specifying the bid price from Eurocopter i.e. Euro 233,345,390 which is equivalent to approximately RM 1.120 billion (or about RM 93 million/unit). Furthermore, it has become common knowledge to some of us that Brazil have also entered into an agreement to purchase 50 units of EC725 at US$1.20 billion (or about RM84 million/unit).

Are we then to conclude that with Mentari’s expose on the matter, they have unwittingly helped to save taxpayers from paying too much for the EC725 and because of the expose, certain individuals were not able to cash in on the ‘original’ deal?

NTR’s urging the PAC to have a ‘cabinet-approved’ inquiry is commendable but he could have provided further clarity on the matter at this point in time since the crux of the problem was an ‘over-priced’ allegation. Seriously though, if we are to accept the accuracy and veracity of Mindef’s disclosure, why bother to have a PAC inquiry.

Quite simply, if one contentious issue can put NTR in sixes and sevens, what more when he becomes the PM and Finance minister in due time.

Update: 1800HR 20/10/08.

DAP TP’s response to NTR’s ‘cabinet-approved’ PAC inquiry into the Eurocopter deal.