Media Statement by Lim Kit Siang in Petaling Jaya on Monday, 27th October 2008: 

PAC inquiry into RM2.3 billion 12 Eurocopter deal must go on regardless of whether the deal is on or off, as it concerns national integrity and proper billion-ringgit defence procurement process

Yesterday, The Malaysian Insider reported that Deputy Prime minister and Finance Minister, Datuk Seri Najib Razak had decided over the weekend to “cut out the EC725 military helicopter contract” when the government “reviewed its expenses in light of falling revenues from crude oil and palm oil and slowing economic growth for the next few years”.

Today’s Bernama carried a more qualified report, “Govt yet to discuss helicopter purchase”, quoting a government source as saying that “In the wake of the global economic crisis, the government will have to discuss further whether to go ahead with the purchase of new helicopters to replace the ageing Nuris in the Royal Malaysian Air Force (RMAF)”.

The government source said the discussion will need the involvement of the Defence Ministry and the Prime Minister, Datuk Seri Abdullah Ahmad Badawi who is the Defence Minister.

The source said the procurement of the new helicopters was only at the letter of intent stage (LOI) and no letter of award (LOA) had been made to any party.
Regardless of whether the RM2.3 billion 12 Cougar EC725 Eurocopter deal is on or off, the Parliamentary Public Accounts Committee (PAC) inquiry into the deal, fixed for two days on Wednesday and Thursday, must be held as scheduled as larger issues are involved concerning national integrity and proper billion-ringgit defence procurement process.

Even if the helicopter deal is cancelled, PAC is duty-bound to investigate into the highly dubious and controversial procurement process as it runs counter to all principles of accountability, transparency, integrity and good governance.

The objective of the PAC investigation should be to identify, if there exist, irregularities or oversights, to ensure the integrity of the Defence Ministry and RMAF are intact, and should such faults are discovered, to recommend the adherence of standard procedures or benchmarking for future tender exercise since such purchases involved a huge sum of the country's funds.

Parliament and the nation are entitled to a searching and no-holds-barred PAC inquiry to produce a report to be tabled by the end of November which can answer many controversial questions, including:

1. The bid price from Eurocopter, including delivery charges amounts to Euro 233,345,390, which is around RM1.1 billion. Why has total price ballooned becoming RM2.3 billion? Has the other half RM1.2 billion allocated to middleman for maintenance service over the next 40 years?

2. Why is Malaysia paying over twice the price for the EC 725 helicopters as compared to Brazil, which is getting 50 EC725 helicopters at RM84 million per aircraft as compared to the RM193 million price tag for the RM2.3 billion Eurocopter deal? Shouldn’t Malaysia be getting over 100 EC725 helicopters at the Brazilian price instead of just 12?

Following the nation-wide furore over the helicopter deal, the PAC has itself come under the spotlight as to its performance, efficacy and usefulness.

As one comment queried on my blog:

What happened to RM4.6 billion Port Klang Free Zone scandal issue even bigger than the RM2.3 billion 12 Cougar EC725 helicopter deal?

The last time PAC reported they were dissatisfied with the outcome of investigations. I thought there independent auditors (was it Price WaterHouse??) appointed at beginning this year to audit. What is the outcome?

What about PAC’s earlier investigation into Middle Ring Road II?

I understand PAC will besides EC725 helicopter deal also investigate the other mega deals highlighted by Opposition in the 2009 budget debate - Maybank purchase of Bank International Indonesia (BII) and RM11.3 billion high-speed broadband contract to TM Bhd?

Has PAC the resources and expertise to do all these? Wouldn’t investigation of BII’s acquisition be closing the barn door after horses have bolted?

On record has PAC done anything to prevent consummation of scandal tainted mega deals or has its investigations so far brought any one especially the big wigs to account?

The PAC Chairman Datuk Azmi Khalid should give a response to this query.

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