Wednesday, March 4, 2009

Defence Ministry steadily reducing open tenders

Tian Chua (PKR-Batu) asked in Parliament the total value of purchases or projects carried out by the Defence Ministry from 2006 until last year. In his written reply on 3 Mar, as reported by Bernama, current Defence Minister Datuk Seri Abdullah Badawi gave the following details:

1. 2006: RM6.7bn spent, of which 31% or RM2.1bn was via direct negotiations;
2. 2007: RM5.2bn spent, 33% or RM1.7bn via direct negotiations;
3. 2008: RM8.2bn spent, 54% or RM4.4bn was via direct negotiations.

Measured by number of contracts:

1. 2006: 52 (9%) of 609 acquisitions via direct negotiations;
2. 2007: 95 (19%) of 497 acquisitions; and
3. 2008: 100 (21%) of 477 acquisitions.

So, whichever way you look at it, the Defence Ministry has been handing out more and more negotiated contracts. Granted, some deals need to be negotiated due to national security issues. But do note – the Ministry has spent RM20bn in the last three years alone. I haven't heard of any significant new, sophisticated weaponry being acquired. But then again, I'm not a military expert. Anyone know any better? Also, an interesting follow-up question would be the amount of commissions and fees paid on these contracts.

Remember PM Abdullah only took over the Defence Ministry recently. These contracts were handed out under another minister. Let's hope past performance is not a guide to the future, in this case.

2 comments:

Anonymous said...

Remember the "commission" on our Scorpene submarines???

dzirhan said...

Some spending are progressive payments, as submarines, sukhois and tanks are being paid throughout length of 9th and tenth Malaysia plans. Also certain tenders, particularly spare parts/ordnance have to be direct negotiation as only manufacturers or in-country agents can provide them. MOD acquisitions isn't just weapons alone, could be anything use to run or administer the defence ministry and armed forces not to mention that national service program comes under defence ministry so some of the figure may include that.