Thursday, October 23, 2008

malaysiakini and the EUROCOPTERS....Which PAPER is Reporting the TRUTH?

The amounts spent on defense is no peanuts and there is now a contoversy about the latest Eurocopter deal.
According to this malaysiakini article 'Suspend chopper deal until after parliamentary probe' the agreement is for a "RM2.3 billion military helicopter deal".
But Mindef explains Eurocopter purchase with the summary of the tenders as detailed below:

"The tender offers received were as such:

T521/07/A/001 - £341.88mil (RM2.08bil)
T521/07/A/002 - RM663.1mil
T521/07/A/003 - €104.6mil (RM494.9mil)
T521/07/A/004 - US$220.5mil (RM777.45mil)
T521/07/A/005 - US$708.3mil; (RM2.49bil)
T521/07/A/006 (Eurocopter) - €233.24mil (RM1.1bil)
T521/07/A/007 - US$348.17mil (RM1.22bil)"


While it is good that 7 offers were received the summary should have included the names of the companies with the offer and here only Eurocopter was highlighted.
If one looks at the basic pricing, Eurocopter is the fourth highest offer and three other deals were at least 20% cheaper.
I wonder if MINDEF prepares tender documents with the necessary minimum specifications and then adds on "nice to have" options? Otherwise why would unqualified contractors bother to bid?
Private companies use the pay to bid system where intending bidders have to purchase the tender documents so that only serious companies will apply. Then you need to include a insurance guarantee for specific performance.
Maybe for defense contracts, companies pay in other ways?

According to the Star, the tender is for RM1.1bil but malaysiakini reports it as RM2.3bil and that is a difference of RM1.2bil.
It looks as if the PAC has a serious task ahead of it. But don't be surprised if that RM1.2bil is a service contract for someone to provide maintenance to MINDEF for the helicopters for 25 years.
This is a brilliant concept and basically creates wealth for some people on a basis of one for one. EUROCOPTER makes RM1.1bil to supply helicopters but we are able to create another RM1.2bil. Truly MALAYSIA BOLEH!

PHOTO: Thanks to http://www.statoilhydro.com/no/NewsAndMedia/FeatureStories/PublishingImages/heli-EC-225-468x195.jpg

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