Sir Can You Teach Me?

It mystifies how a tale spin spun often enough can become a gospel truth to some people. The most current spin that makes me angry as it confuses even die hard military enthusiasts is the spin that RM8 billion for the AV8 APC by Deftech is highly overpriced with implied hints of corruption bla bla bla!. This is coming from someone who says on one hand that a leading APC would cost RM10 million each, but then goes on to say that the government would only need RM2.57 million to buy 257 APCs, which makes one unit only costing RM10,000 each, cheaper than a national car. Don't believe me, read it here at your favorite Harakah Daily article from which I will only quote the pertinent portion.

Keputusan kerajaan meneruskan hasrat membeli 257 unit kereta tempur berperisai AV8 (APC) bernilai RM8 bilion wajar dipersoal, kata Ahli Parlimen Sungai Siput, Dr. D. Jayakumar.

Menurut beliau, sebut harga yang ditawarkan oleh DRB-Hicom Defence Technologies Sdn. Bhd. (Deftech) adalah tiga kali ganda lebih mahal dari harga pasaran sebuah APC terbaik di peringkat dunia; iaitu tidak melebihi RM10 juta seunit.

“Dengan hara RM31 juta sebuah sedangkan harga sebuah APC terkemuka di dunia hanya RM10 juta, maka tiga kali gandalah,” ujarnya petang tadi di Dewan Rakyat.

Difahamkan, kerajaan sepatutnya memerlukan RM2.57 juta sahaja untuk membeli 257 APC, bukannya RM8 bilion seperti yang dipersetujui Menteri Pertahanan, Datuk Seri Ahmad Zahid Hamid bersama Deftech.

I have no idea where these people get their per unit price of an AV8 is at Rm31 million per unit, I can only deduce they just divided the project price of Rm8 billion with 257 units, ie RM31,128,404.70 each. Unfortunately they conveniently forget that the RM8billion price tag includes Development Cost for Deftech to come up with an indigenous APC so much so that if additional units are purchased, then the unit price will be lower as it will be amortised over a larger quantity is also overlooked.

Now let's crunch some numbers and see where things fall okay.

Let's look at Germany's Boxer APC Program as they purchased a similar number of APCs as what Malaysia is proposing to purchase in 2006.

Boxer Program Germany :


Development Cost : $3.1 billion
Unit Cost : $625,000
Qty : 200 => 200 x $625,000 = $125,000,000

Total Cost for 200 units = $3.1 Billion + $125 million.
Total Program cost : $3.225 Billion
Actual Unit cost = $3.225 Billion / 200 units=$16.125 million (Note : At 2006 prices)

AV8 Program Malaysia :



Development cost = $A ?
Unit Cost = $B?
Qty : 257 => 257 x $B? = $C?

Total Cost for 252 units = $B + $C.
Total Program Cost = $2.5 billion
Actual Unit cost = $2.5 billion / 257 units = $9.727 million each.

Now let's again just use the market price of a popular APC that using their yardstick would cost only $1.9 million per unit.

Stryker Program USA:



Development Cost : $8.7 billion GAO 2003 estimate
Unit Cost : $1.9 million
Qty : 2300 => 2300 x $1,900,00 = $4,370,000,000 or $4.370 billion.

Total Cost for 2300 units = $8.7 Billion + $4.37 Billion.
Total Program cost : $13.07 Billion (Let's make it an even $13 Billion eh?)
Actual Unit cost = $13 Billion / 2300 units=$5.652 million (Note : At 2002 prices)

But seriously folks, do you really think that Malaysia can amortise the cost over a large order quantity as the Americans did? A more realistic comparison is the German Boxer program which makes our AV8 more competitive in pricing. Anyway those comparison prices are for a monetary value of 5 years or more ago and not current prices, as then it will actually will be more than calculated.

That is why I still maintain we should proceed with the project at $2.5 billion as this is a viable and competitive price for Malaysia to gain an indigenous manufacturing capability which includes development costs, that surely can be amortised over more units in the future as all the older APCs will have to be replaced, and by then the actual unit cost will surely fall further.

By the way, if you are wondering where I got the figures, these are taken from the article below, which gives a $2.5 billion figure in US Dollar that suspiciously discounted to 10 percent seems to be the figure being stated by their spin but in Malaysian ringgit. But hey I did not spin my numbers eh. It is really around RM8 Billion when you change it from US$2.5 billion.

Malaysia orders 257 APCs from DefTech

Published: April 22, 2010 at 8:08 AM

KUALA LUMPUR, Malaysia, April 22 (UPI) -- The Malaysian army awarded a $2.5 billion contract to Malaysian company DRB-HICOM Defense Technologies for 257 armored personnel carriers.

A letter of intent was signed with DefTech, which will develop the 8x8 wheeled APC vehicles and manufacture 12 variants, the Ministry of Defense said. Variants include a personnel carrier, anti-tank weapon carrier, command-and-control and anti-aircraft weapon vehicles.

The army will take delivery of the prototype APC for testing next year.

The Malaysian-developed APC is being built from the PARS APC produced by FMC-Nurol Defense System of Turkey in co-operation with General Purpose Vehicles, which has headquarters in New Haven, Mich.

The Pars APC was unveiled in 2005, equipped in an 8x8 chassis configuration but is also available in 4x4 to 10x10 setups. The APC is aimed at the Turkish Land Forces Command.

The Pars APC is a modular design and can be fitted with various armament fits, including external and turret mounted armament, and can accommodate one- or two-men turrets.

The DefTech announcement was made on the final day of the Defense Service Asia 2010 exhibition at the Putra World Trade Center in Kuala Lumpur.

Datuk Seri Mohd Khamil Jamil, DefTech chairman, said delivery will be over six years with the first vehicles commissioned by the army in January 2012.

DefTech will farm out some of the manufacturing to local suppliers in many of Malaysia's regions. Contracts for the work will be sought as soon as possible.

DefTech is also co-operating with Denel of South Africa to build a two-man turret for the APC while Sapura Thales is expected to become the systems integrator.

There was some surprise over the amount that the government is to pay for the APCs given the large number that it has ordered, a defense analyst told The Malay Mail newspaper. Based on the number of vehicles to be procured and the contract price, each vehicle would cost $10 million, a much higher figure than if the government decided to purchase comparable off-the-shelf 8x8 APCs.

One analyst cited a German-built Boxer Multi-Role Armoured Vehicle cost of round around $625,000 each when the German army bought 200 in 2006. The Boxer's development cost exceeded $3.1 billion.

The base price paid by the U.S. Army for its Stryker 8x8 APCs is around $1.9 million each. However, more than 2,300 Strykers were ordered, the analyst said.

Defense analyst Dzirhan Mahadzir said development costs of the British Future Rapid Effects System should be considered before making assumptions about the Malaysian APC contract.

The British FRES program cost nearly $7 billion before it was canceled in 2008. But the project, including procurement and whole-life cost, if given the go-ahead, eventually was to have cost another $12.5 billion.

The U.S. Army didn't spend a huge amount on the development of the Stryker as it was developed from the MOWAG Piranha APC, Mahadzir said.

DefTech, set up in 1996, invested nearly $22 million in a dedicated defense and security manufacturing division in Pekan in Pahang state in 2001. The 25-acre site has a covered work area of 180,000 square feet. It also has a test track with NATO standard obstacles for all armored and soft-skinned vehicles, both wheeled and tracked, of up to 60 tons.

Why Don't We Just Call It A Frigate Program Then?

As we all aware now, Boustead Naval Shipyard has received the LOI to build six units of Second Generation Patrol Vessel/ Littoral Combat Ship with combatant capabilities. BNS is supposedly negotiating the specifications with the Malaysian Government before they can receive the LOA to start production. Nonetheless despite the general man in the street who may have thought that these vessels would be a continuation of the Kedah class upgraded to their combatant capabilities, a recent Jane's report has stated as per following extract :

Date Posted: 18-Oct-2010

Jane's Navy International

The SGPV will be a larger and more heavily armed follow-on to the Kedah-class corvettes built for the Royal Malaysian Navy (RMN) under the Next Generation Patrol Vessel programme, although the final design and equipment fit has yet to be finalised.

The SGPV specification calls for a length overall of 99.5 m and displacement of 2,200 tons (full load) in comparison with Kedah-class figures of 91.1 m and 1,650 tons.

Several foreign shipbuilders have submitted proposals based on existing designs that would be modified to fit the Malaysian requirement. BAE Systems is offering a larger version of its 90 m offshore patrol vessel (OPV), Damen Schelde has proposed its SIGMA design, DCNS its Gowind family, Navantia the Caribe-class OPV it is building for Venezuela and ThyssenKrupp Marine Systems its K130 corvette.

Looking at the submitted proposals, these are the candidate hulls based on the specifications of 99.5 m length and 2200 tons displacement.

BAE Systems offering :Current Length : 90.5 metres

For Damen Schelde, I have chosen their Moroccan Sigma Program as the most compliant to the specs :

Dimensions (m) 105,11oa x 13,02 x 3,75 (FMMM 1)
97.91oa x 13.02 x 3.75 (FMMM 2 & 3)
Displacement (t) 2335 (FMMM 1)
2075 (FMMM 2 & 3)

From DCNS, the most likely candidate is the Gowind 200 ;

Length 103m, Displacement 1,950 tonnes

Next is the Navantia Caribe class ;

Displacement: 2,419 tons, Length: 99 meters

and finally the Thyssen's offering as shown during LIMA'09 ;


Ship's Length: 97.9 m, Maximum Displacement: 2,200 tons

Whether BNS own stretched Meko 100 design is still in the game is anybody's guess now but to me still a contender.

The length: 102 meters , Maximum Displacement: 2,200 tons

What many may not realise it is that unlike the Kedah class that are really FFBNW Corvettes, this new batch ship hulls are going to be effectively as big as the Jebat class frigates and except for the BAE Systems OPV, the rest are actually frigates in design and weaponry, fitted with or otherwise. In fact the namesake LCS of the US Navy are actually closer to destroyer size in length and weight. Thus for me at least, if these ships will be fully armed combatants where they will be as good as frigates, I will no longer mourn the cancellation of the second batch frigates from BAE Systems. These babies will be at least as capable and in more numbers than the planned frigates. In fact looking at the given reasons for Trinidad and Tobago cancellation for their OPV's from BAE Systems, I got a sense of deja vu with our own experience with the Jebat class. Maybe this should be a factor in our evaluation eh and so be damn with our naval traditions. Now the remaining quandary for me is , if these new ships will still be called patrol vessels rather than frigates when they enter service and thus continue the naming tradition using Malaysian state names, to which ship shall we then entrust the name of KD Hang Tuah once the current ship is decommissioned, since his four brethren will still be in service then.

Praises For Being Fair To The Fairer Sex

A bit dated but it is good to hear praises for our national policies once in a while from foreigners.

Indian Navy can learn from Malaysian Navy on having women officers onboard.

PORT BLAIR: Still not ready to have women officers on board, the Indian Navy can take a hint from the Royal Malaysian Navy which has Lieutenant Farah-al-Habshi onboard a warship here for Exercise Milan, a multinational exercise witnessing the participation of 13 navies of the Asia-Pacific region.

The above is just a sample of the news coverage in India. At least we showed that in the Malaysian service, the glass ceiling may be set a little higher or does not exist at all.

MRSS Where Art Thou?

The SGPV LCS program has now been given a new breathe of life. Now awaiting for the day when the fire will be lit for the more pressing MPSS/MRSS logistics ships. They don't have to be flush decked mini carriers as many are dreaming of below :

Pictures Courtesy Of Standupper from MYMIL

It will be good enough if the Navy can get their hands on any new designed LPD's though as we really don't need any flatdecks at this stage methinks. A two helipad ship should be enough. Just get going on replacing the Ex-Inderapura as the two remaining aging logistic ships surely cannot last the pace if nothing is done quickly. The LPD image shown at the backdrop during the PM's opening of NGV Tech's Bagan Datoh's shipyard looks good enough.

Especially since we won't be needing the new frigates anytime soon. This can be deferred to another date since the SGPVs will be combat capable and can be strike units on their own, thus alleviating the need for the larger strike combatants for the immediate future. So please use any funds available for the MPSS/MRSS instead. But we won't be complaining if the Government surprises all of us by granting all these wishlist items eh?

The Second Generation Patrol Vessel Project Is On!

Finally, BHIC announced they have received the LOI. And the vessels will have combat capabilities. So let's see how they will be armed, eh!

BERNAMA.COM
business

October 18, 2010 16:59 PM

Boustead Gets Letter Of Intent To Build Six Patrol Vessels

KUALA LUMPUR, Oct 18 (Bernama) -- Boustead Heavy Industries Corporation Bhd announced today that its subsidiary, Boustead Naval Shipyard Sdn Bhd (BN Shipyard), has received a letter of intent from the Defence Ministry to undertake the construction of six second-generation patrol vessels with combatant capabilities.

The value and duration of the project is to be negotiated with the government, the group said in a filing to Bursa Malaysia.

The contract for the Littoral Combatant Ship (LCS) will have no material effect on the group's earnings for the financial year ending Dec 31, 2010, but would contribute positively to future earnings, it said.

"The new contract to build the LCS is a reflection of the government's confidence and trust in our ability to deliver on obligations.

"As we have been engaging the government on the technical and commercial packages of the project for some time, we are confident that the contract can be concluded early," said the managing director of BN Shipyard, Tan Sri Ahmad Ramli Mohd Nor.

He also said the company had gained invaluable knowledge and experience from the First Patrol Vessel Contract, especially in areas of value adding and enhancement of local content.

Being full combatants, the design of the LCS will have many added capabilities and equipment systems.

"This will require additional technology investments, some of which we will acquire while others will be developed in partnership with defence industry players," Ahmad Ramli highlighted.

BN Shipyard has engaged more than 500 local vendors in the past two years.

In 2007, a Vendor Development Programme was established by the company to groom locals into capable entities.

Ahmad Ramli said the LCS project is expected to see an increase in the participation and development of local vendors, in line with the 60 per cent local content targeted, for the project.

-- BERNAMA

Aiyaa..You Spin one ma?

Please don't spin fairy tales if you do not know head or tail..statement in Malay but I am sure you can understand if you call yourself Malaysian right!

ISU PEMBANGUNAN PANGKALAN UDARA KUALA LUMPUR (TUDM SG. BESI)


Ketua Setiausaha Kementerian Pertahanan, YBhg Datuk Dr. Haji Ismail Haji Ahmad telah mengeluarkan kenyataan seperti berikut:

Dalam jawapan bertulis YB Dato’ Seri Dr. Ahmad Zahid Hamidi di Parlimen pada 11 Oktober 2010 berkenaan cadangan pembangunan semula Pangkalan Udara Sungai Besi, beliau telah menyatakan bahawa tiada Surat Tunjuk Niat (Letter of Intent) dikeluarkan kepada 1Malaysia Development Berhad (1MDB) setakat ini.

Walau bagaimanapun, pihak-pihak tertentu telah mengaitkan jawapan bertulis tersebut dengan satu projek pembangunan yang berlainan, iaitu Kuala Lumpur International Financial District (KLIFD).

Perlu saya perjelaskan di sini bahawa Pangkalan Udara Sungai Besi bukanlah tapak pembangunan KLIFD. KLIFD sebenarnya terletak di lokasi yang berlainan di Kuala Lumpur.

Oleh demikian tohmahan YB Tian Chua bahawa perjanjian strategik pembangunan KLIFD telah dimeterai sebelum Surat Tunjuk Niat dikeluarkan adalah tidak berasas sama sekali.




“TRANSFORMASI MELALUI INOVASI”

UNIT KOMUNIKASI KORPORAT
MINDEF
KUALA LUMPUR
13 OKT 2010 (7.00 petang)

Via http://mymil.forums2u.com/newspaper-ebook-and-website-f20/mpsanewspaper-t32-210.htm#35087

Photoshop This

Recently there has been a brouhaha in the cyberspace supposedly one of a series of 12 photos showing the successful test firing of SM39 Exocet missile from KD TAR had been photoshopped, so it is faked event even though the other 11 was not edited at all.

Ok lah let's see if you can photoshop this movie and say it is also a fake.