Govt scraps Eurocopter deal!

Malaysia will ditch the RM2.3 billion Eurocopter defence deal as it battens down to face the global economic storm, sources said today. [The Malaysian Insider, 26/10/08]

The government has decided to cancel the controversial Eurocopter deal that would have cost the country RM2.3 billion. It was previously understood that Malaysia would purchase 12 EC-725 Cougars to replace the aging Nuri fleet.

Yet, questions were raised incessantly regarding the transparency of then Defense Minister, Datuk Seri Najib Tun Razak's handling of the deal. It was revealed that Brazil had purchased the same Eurocopter models for half of what Malaysia was to pay. The Eurocopter deal, if signed, will cost Malaysia a staggering RM2.3 billion for only 12 units while Brazil paid RM4 billion for its 50 units!

Likewise, the Defense Ministry was also questioned for choosing the costly Cougar when apparently there were cheaper models with similar specifications from other manufacturers on its shortlist.

Read Brazil buys Eurocopters at half of our price for more details.

On October 26, the government finally decided to abandon all negotiations over the purchase of the Eurocopters; ending all speculation and debate over the discrepancies linked to the deal. Najib, who is also the Deputy Prime Minister said that the deal had to be cancelled due to falling revenues from crude and palm oil and the weakening global economy in the wake of a financial turmoil.

The deal itself had received some flak from the Opposition who have called on the Anti-Corruption Agency (ACA) and the Public Accounts Committee (PAC) to investigate the irregularities surrounding the high profile purchase. DAP veteran Lim Kit Siang demanded that the deal be put on hold until the air is cleared by anti-corruption agencies before the government proceed with negotiations. PKR Youth have also lodged a police report at the Anti-Corruption Agency in Putrajaya.

With what seemed like an excellent opportunity for the Opposition to find fault in the Prime Minister-to-be, all efforts to undermine Najib's credibility have to be forsaken as there is now no case against Najib with the Eurocopter deal now cancelled.

However, one can only speculate on whether it was a sincere consideration by the government over the ballooning expenses the Cougars might incur or was Najib simply trying to dodge the bad press being thrown at him from all quarters?

Either way, for the RM2.3 billion, the Malaysian people have indeed gained what was not put to waste in overpriced government deals.


LATEST UPDATE: The Royal Malaysian Air Force stated that the deal was still on despite the news of it being cancelled. Refer to Eurocopter deal still on behind our backs?