The leasing system adopted by Malaysia for the acquisition of helicopters to be used by government agencies and security forces will save costs, Prime Minister Datuk Seri Anwar Ibrahim has said.
The Prime Minister told Parliament on Thursday that the RM16 billion contract to lease over two dozen Leonardo helicopters for 15 years is backed by a tacit guarantee from the Italian government. The contract was awarded based on submitted proposals and was the result of a government-to-government negotiation, he said.
“We wanted the negotiations for the helicopters to be transparent and directly between governments, without the involvement of agents,” Anwar said. “We also felt it would be more efficient to streamline the negotiations to avoid multiple discussions among different agencies.”
Anwar said the lease contract will include a clause for training maintenance and repair training, as well as parts manufacturing under an agreement for knowledge and technology transfer. The leasing arrangement helps to alleviate the financial burden on the nation and ensures more transparent procurement processes, he said. “Even though it might be cheaper if we just buy it, in the end, we find that the maintenance costs of the helicopters are higher than the initial purchase price,” he said. The government is also able to save on ongoing maintenance and repair costs, he added.
Under the lease-to-own arrangement announced on Nov. 20 by Defence Minister Datuk Seri Mohamed Khaled Nordin, Malaysia will have the option to purchase all 28 helicopters for a nominal RM1. Leonardo will supply 12 aircraft for the Royal Malaysian Air Force, four for the Maritime Enforcement Agency, and two for the Navy. The Royal Malaysian Police and the Fire & Rescue Department will receive seven and two units, respectively, while the other helicopter is for the Prime Minister’s Department.
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