DEFENCE MINISTRY RENEGOTIATING TERMS OF SUBMARINE RESCUE SERVICES
One ought to be puzzled at the statement made by Deputy Defence Minister Abu Seman in parliament Monday March 2nd, 2009 (Star, Tuesday March 3rd, 20009) regarding the award to a bumiputra company for the submarine rescue services for the Royal Malaysian Navy. He is reported to have said that the offer made by the company was RM 98.4 million per year for a period of 20 years which was disagreed by the ministry. Hence, a fresh offer has to be made by the company.
The deputy minister further said that, “the offer to the company was through direct negotiations as the navy wanted to gain full knowledge on the submarine rescue procedures and also to get the best terms for the services”.
The statements made by Abu Seman is littered with contradictions, and smells of nothing less than an attempt at inflating costs and awarding the contract to a favoured company. This has been the issue that most defence related companies has been arguing all along i.e. why direct negotiation, and worse still the award was made to a company whose core business is not defence related, but that of a construction company. This is where Abu Seman was shy in revealing.
Most in the defence industry will vouch that the Royal Malaysian Navy is about the best of the three services in terms of planning for its force development, as well as in making decisions for capital purchases and support services. This being so, the statement made by Abu Seman to justify the award through direct negotiations to a construction company is arguable.
The submarine rescue service is a highly specialized service, and the navies within the ASEAN region (notably Singapore and Indonesia) does not have a dedicated submarine rescue service within its organization. The service is being outsourced, and presently there are only two renowned submarine rescue service companies available in the world i.e. one is a US company and the other a UK company.
There is in Malaysia today representatives representing the two foreign submarine rescue service companies. The question asked is why were the representatives not called in to offer their bid. Knowing that the services required is so specialized, wouldn’t it be better for the navy to have more than one company bidding, thus allowing a thorough evaluation be made? Isn’t the open tender system the best in terms of getting good value for money?
Certainly the statement made by Abu Seman needs rethinking, and knowing our Royal Malaysian Navy, most would agree that the decision to award the job through direct negotiation is not the navy’s wishes, but that of someone else with pecuniary interest.
Mohd Arshad Raji
Kajang
