Thursday, March 05, 2009

Defence Ministry and Corruption

During my previous life as a computer salesman, I had the opportunity to involve in some business deals with Mindef. Most deals, since not worth in billions, were according to the books except for the 'entertainment' parts. These guys in the uniforms had big size of appetite and they knew what they wanted.

Defence Ministry rebuked for overspending
Gabrielle Chong | Mar 5, 09 3:39pm

The Defence Ministry today came under fire for failing to justify the RM4 billion worth of contracts given out through direct negotiations in the last three years.


bersih protest constitution amendment 071207 tian chuaPKR Batu parliamentarian Tian Chua, who launched the attack, said: "The number of defence contracts distributed through direct negotiations rose from 52 to 100 from 2006 to 2008 while the percentage rose from 8.54% to 20.95%. (see chart below)"

"At first sight, this seems to be a controllable trend. However, if you look closely at the real value of contracts given out through direct negotiation, you will realise that there has been a very drastic increase from RM2.113 billion to RM4.392 billion," he told reporters at the Parliament lobby.

According to Tian Chua, the proportion of defence contracts distributed through direct negotiations has also soared from just 31.42% to 54.12%.

"But despite the massive amount of public funds spent on defence, the ministry has failed to divulge the details of the negotiation processes," he said.

Why the need to splurge?

Describing the figures as an unhealthy trend that violated the principles of free market and competition, Tian Chua questioned the need to splurge on weapons at a time when the country was facing an imminent recession.

"RM7 billion was channelled into the first stimulus package to revitalise our slumping economy while a staggering RM8 billion was spent on arms last year alone and the majority of those arms deals were made with foreign firms.

"Whose economy are we really trying to stimulate?" he asked.

military malaysia navy french built submarine scorpene classThe figures were released in a written reply by the ministry in response to Tian Chua's oral question that was submitted during Tuesday's Parliament session.

The ministry also explained that the processes in which contracts were awarded through direct negotiation had to be confidential and concealed from the public because to do otherwise would expose the country to security threats.

The ministry added that direct negotiations were also a way to ensure uniformed and systematic attainment of arms.

However, Tian Chua has dismissed the reasons as inadequate to justify the sharp increase in spending taxpayers' money on contracts that were awarded without open tenders.

In addition, he also commented that the ministry had spent RM98 million on two submarine rescue units.

"Even all the member states of Nato share only one submarine rescue unit. Is there a real necessity for our country to possess two?" he asked.

Something fishy going on

In another development, Tian Chua also requested the Agriculture and Agro-based Industries Ministry to put an end to the requirement for fishermen to use special insulated fish containers authorised by the Fisheries Development Authority of Malaysia (LKIM).

On March 1, 2009, LKIM made it compulsory for all fishmongers to use only insulated fish containers manufactured by ACE Polymers (M) Sdn Bhd.

This incited protests from both fishermongers as well as other manufacturers of insulated fish containers.

"The new insulated fish containers are identical to those manufactured by other firms, but cost four to five times as much as the old ones.

"This new regulation will not only bring unnecessary hardship to fishmongers but also cripple the other firms which have been previously manufacturing and selling similar products," he said.

Concluding that the regulation smacks of cronyism, Tian Chua stated he would lodge a report with the Malaysian Anti-Corruption Commission (MACC) on the matter.

malaysia defense contracts and values 050309

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