Media Statement by Lim Kit Siang in Petaling Jaya on Friday, 24th October 2008: 

Parliament should not approve a single ringgit for the purchase of the RM2.3 billion Eurocopters if the deal is not approved by PAC and Parliament

Public Accounts Committee (PAC) Chairman Datuk Seri Azmi Khalid has said that the Defence Secretary-General Datuk Abdu Bakar Abdullah will be among those called to assist the PAC to scrutinize the Eurocopter deal.

It is no exaggeration to say that this will be the most important investigation in PAC history, as for the first time since Merdeka 51 years ago, a major government contract the RM2.3 billion 12 Cougar EC725 helicopter deal to replace the Nuri helicopters will hinge on the report of the PAC following its scrutiny into the Eurocopter deal.

This is the only implication of the Cabinet decision at its meeting last Friday (17th October 2008) giving "the green light" to the PAC to investigate the Eurocopter deal.

Deputy Prime Minister and Finance Minister, Datuk Seri Najib Razak said in Pekan on Sunday that at his suggestion, the Cabinet "has agreed" to the PAC scrutiny as "it was better for the PAC to inquire into the deal".

Najib said: "The PAC can make its own conclusion of the purchase after studying the various issues involved in the deal."

This must means the suspension of the Eurocopter deal as well as a freeze on the Letter of Intent (LOI) issued by the Defence Ministry for the 12 Cougar helicopters, as it will be a mockery of the Cabinet decision as well as contempt of Parliament for the Defence Ministry to proceed with the deal without waiting for the outcome of the PAC investigation.

For this reason, it is not only MPs but the entire nation which is waiting for the outcome of the PAC scrutiny, as it is playing a very important role in the final decision whether the government should go through with the RM2.3 billion Eurocopter deal.

If the PAC and Parliament disapprove of the Eurocopter deal but the government persists in going ahead with the procurement, then Parliament should refuse to approve a single ringgit for the purchase of the RM2.3 billon Eurocopters.

Has the PAC the expertise among the PAC members to do a professional scrutiny of the Eurocopter deal and must they depend solely on professional and expert advice from the Defence Ministry and the Royal Malaysian Air Force in the inquiry?

It makes nonsense of an independent, professional parliamentary scrutiny of the Eurocopter deal if the PAC has to depend solely on the technical and expert advice fof the Defence Ministry and the Royal Malaysian Air Force.

The PAC must have independent and professional advice from people knowledgeable and have working experience in the aviation industry, especially those who know about helicopter operations and the history of Nuri/RMAF such as an experienced helicopter pilot.

The PAC should not just summon the officials of the Defence Ministry and RMAF, but also call up representatives from the seven helicopter tender bidders, for they will be the best persons to inform the PAC about the tender process, particularly whether it had been one-sided or unfair.

One visitor to my blog has suggested one aspect of the helicopter procurement which the PAC should investigate, viz:

"The PAC needs to study not only the tender process itself but also the thinking and policies that generated said tender which do not address the needs of the nation or the Armed Forces adequately.

"The Combat in CSAR (Combat Search And Rescue) generally denotes the capability to retrieve personnel from hostile territory. Such helicopters are usually fitted with enhanced self-protection systems that are very expensive. The Nuri replacement does NOT need such systems as the likelihood of the RMAF conducting these missions is infinitesimal. In the trade, it is referred to as 'gold plating'.

"What they do need is adequate numbers of aircraft to ensure availability and service coverage, which 12 does not.

"MINDEF has much more explaining to do than just how Eurocopter got the tender."

Another comment on my blog touched on another area which the PAC must take on board in its scrutiny to ensure accountability, integrity and good governance, viz:

"The Defence Ministry Sec-Gen conveniently left out the fact that there is a middleman involved in this deal. We need to pressure the government to reveal who is behind this local company. Also, my understanding is that there is a separate contract for maintenance, spart parts and training which is separate from the RM 2.3 billion. We need to know which local company is involved in this separate contract."

The PAC must able to address these issues in its report on the scrutiny of the Eurocopter deal.

According to Azmi, two days have been fixed for the PAC inquiry into the RM2.3 billion Eurocopter deal, next Wednesday and Thursday (Oct. 29 and 30), and he thinks that two days are adequate for the PAC to wrap up its scrutiny.

I am quite dubious that a two-day hearing is adequate.

The Defence Ministry secretary-general has issued a statement defending the the decision to procure the Eurocopters after the evaluation of the seven bids in three parts the technical evaluation committee, the offset evaluation committee and the price evaluation committee.

If the PAC is to do a thorough and professional scrutiny, it would have to study the seven tender bids and their respective merits in each of the three separate evaluation of technical, offset and price, including the submissions by the representatives of the seven helicopter tenderers.

Or is the PAC going to depend solely on the testimony from the Mindef and RMAF? Then the PAC will not be able to produce a satisfactory and acceptable report.

In any event, the PAC should table in Parliament its report on the RM2.3 billion 12 Cougar EC725 helicopter deal latest by end of November to allow MPs to study and decide whether to have a full debate of the PAC report before end of the budget meeting on Dec. 18, as under the Standing Orders, a 14-day notice is required for a motion to debate the PAC report, whether to accept or reject it.

* Lim Kit Siang,  DAP Parliamentary leader & MP for Ipoh Timor