Defence Asset Procurement Policy - A Need

Note: this article is intended as a follow through to my previous article titled "Procurement Shift in the Pipeline?"

The last major large scale defence asset procurement made under a single programme was under the PERISTA (Program Pembangunan Rancangan Istimewa ATM) which began in the late 70's which trickled through the 1980's.

The programme which saw Malaysian Armed Forces (MAF) underwent a large scale modernization programme which changed it's face from a counter-insurgency centric defence force into a largely capable semi-conventional armed forces.

 

Part of PERISTA Programme.  Unfortunately, there is a dearth of material on PERISTA purchases.

The programme, ostensibly to strengthen the military to be able to defend the nation from external threat in view of declining threat from communist terrorist activities, were actually in response to direct threat from Vietnam. The convention back then was that the fall of Vietnam will precipitate the beginning of Domino Effect that would see the whole region to fall into war against communism, a war which thankfully did not materialise. (The war did not materialise largely due to the fact that China, Vietnam and Soviet Union found themselves at opposite end of each other's crosshair, that itself worth an article on its own right).

  

Mass Asset Obsolescence Threat

The last assets purchased under the programme were inducted into our order of battle more 30 years ago. Some of these assets have since been retired due to heavy wear and tear. Others rendered obsolete due to technological advancement and changing geopolitical and geostrategic threats. 

However, Malaysian Govt to-date has yet been able to replace most of these assets due to myriad of reasons, from the prohibitive cost all the way to political reasons.

Prohibitive Cost

Wagging war isn't cheap. So is maintaining peace. 

With cost of many defence assets are in the range of millions to billions of ringgit, any major purchases would be very prohibitive on paper. For example, the recent SGPV contract is costing the Govt RM6 billion with a ceiling price of RM9 billion for 6 Gowind class ships. 

This is far different from defence asset purchases made in the past, where between 2 or 3 assets of similar class can be purchased with the same price. (Assets of similar class but very different in capabilities as modern assets are better equipped)

Modern assets are also likely to be able to have multiple functions. Examples would be aircrafts in the past are mostly single role functions. Jets like F14 are interceptors while SU24 are bombers. Compare this with Rafale and Super Hornet which are multi-role combat aircrafts, meaning a single platform can be used for ground attack, naval warfare and air interdiction. All these increased capabilities have resulted in a more expensive platform. 

The prohibitive costs had resulted in many governments choosing the following ways in replacing their combat assets:

Minimal Number of Assets Purchased 

Minimum number of assets is purchased and thus is able to show budget consumption. 

Usually, the numbers purchased are sufficient for the nation to operate at least a squadron of the equipment. These nations would then increase the number of the assets by purchasing one or two units of the same assets until they reach the optimum number required. 

Based on past records, Malaysia did practised this method. Our Nuri helicopters for example, were purchased using this method. Using this method, RMAF slowly became the largest operator of Sikorsy S61A4.  First bought in 1967, the giant beast is still operating till today.  Just last Sunday, I saw one unit flew past my home in PUTD (Pasukan Udara Tentera Darat) colours. 

 

RMAF Helicopters.  Take note of RMAF S61A4 Nuri.  We were once the world's largest operator of S61A4 heli.

S61A4 Nuri in Malaysian Army Air Corp colours.

S61A4 during a resupply during Insurgency - Credit Maj (R) Nor Ibrahim, Perajurit and Hamzah Dollah (ex-RMN)

However, we seemed to have forgotten the lesson when after the procurement of 8 units FA18D and 18 MiG29N back in the mid-90, we did not follow through with additional purchases. This had resulted in RMAF being unable to operate at least 5 combat squadrons. 

 

Both RMAF combat jets and trainers.  The low number had resulted in serious wear and tear that had forced quite a few to be retired.  Credit wikipedia

Concurrently, with minimal number of jets available, RMAF had to increase the operational tempo for both planes, resulting in wear and tear that had forced several units had to be retired. In fact, RMAF would be retiring her MiG29N which was purchased in 1993, much earlier than RMAF S61A4 Nuri which is entering its 50 years in service.

RMAF MiG29N.  Purchased in 1993, it is expected to be retired from RMAF service in 2015.  But so far, no official confirmation on the retirement.  Credit airliners.net

Buying Basic Model 

Another measure taken by some governments in increasing their military presence is by procuring basic model for their armed forces.

For this method, let's look at the practice that had been used by 3 nations; United Kingdom, Malaysia and Indonesia. 

United Kingdom

UK's Eurofighter Typhoon is the prime example of buying basic model to beef up their air force. 

RAF Tranche 1 Eurofighter Typhoon.  Credit http://www.fast-air.co.uk/typhoon-block-tranche-summary/

With only Tranche III aircrafts are considered as MRCA, UK had entered the war in Libya and against Daish with only Tranche I Typhoons, which incidentally was only purposed as air-to-air superiority fighter and interceptor. With Tranche III Typhoon have yet to reach operational capabilities, the task to bomb targets in Libya and Syria had to fall on Panavia Tornado GR4.

 

Panavia Tornado GR4.  The jets were once offered to RMAF by the British Govt.  But due to unknown reasons, we purchased BAe Hawk 208 and 108 instead.  Considering that Tornado is going to be phased out by RAF, it is no love lost for RMAF.  Credit - wikipedia

Indonesia

Before we discuss about our own predicament, let's look at Indonesia's experience. 

Economic crisis had resulted in Indonesia being unable to upgrade their military in the late 90's up to 2010 (this no longer holds true and Indonesia together with Vietnam are probably the second and third largest military spenders in the region).

 

Newer versions of F16 Block 52 which Indonesia had managed to purchase after the end of the sanctions.  Credit - http://www.merdeka.com/peristiwa/ini-wajah-f-16-block-52-id-kekuatan-baru-tni-au-dari-amerika.html

With large number of their F16 unable to fly due to sanctions for human rights-related issue in East Timor, they opted to purchase Russian-made SU-27 and SU-30 Flanker. Unlike Malaysian and Indian approach of buying full specs aircraft, they opted for basic model, ie being able to fly but without the modern avionics, which would hamper its ability to interdict modern combat aircraft with full capabilities. (Avionics play large part in ensuring the missile system, counter-missile system and electronic warfare suite can be operational. Otherwise, it would be like just flying a fast-moving jet of Second World War).

 

TNI AU SU27SK
http://www.defenseindustrydaily.com/indonesias-air-force-adds-more-flankers-03691/

It was envisioned that the planes would be upgraded when they have sufficient budget to do so.

Malaysia 

The best example for Malaysia is the purchase of the Kedah class New Generation Patrol Vessel (NGPV). Using the Meko 100 design, it was envisioned to be the platform for RMN to become the maritime powerhouse in Southeast Asia. 27 platforms of the ship was to be procured under 3 Tranche, with 6 units is to be built in the first Tranche at the cost of RM6 billion. 

KD Pahang of the Kedah class patrol vessels
Credit - Defence Update

The company, PSC Naval Dockyard promoted the ship as a cost-effective measure for RMN as the ships would be introducing a novel concept called Fitted For But Not With, or in short, FFBNW, which was successfully implemented by Royal Australian Navy with their Anzac class frigate. 

HMAS Anzac frigate of Royal Australian Navy

In this concept, modules to accept weapons platform are built onto the ships and the ship's CIC (Combat Information Centre) has the capability to accept any weapons system that is plugged into the module. Similar to the plug-&-play found on today's PC.

In a way, it was supposed to be a novel approach. With a planned capacity of 27 ships, this option gives RMN the flexibility of not needing to buy 27 units of equipment to be placed on all 27 ships. 

A comment made by my friend. 

The option also RMN to be able to replace damaged system easily when required. It was a beautiful concept. But like any other concept, it was flawed. 

Signs of trouble began when the ships were built at PSC Naval Dockyard at Lumut. Rumours of subcontractors not being paid their due began to surface. The company was in trouble. 

Boustead Holding was asked to be the White Knight and came up with a rescue plan. (Boustead Holdings main shareholder is Lembaga Tabung Angkatan Tentera or LTAT.  Which is logical for them to rescue the PSC Naval Dockyard as the future of their members is at stake).

Later, the Parliament Accountability Committee or PAC determined there were improprieties in the company that led to the financial problem.  However, the person responsible for the problem has yet to be prosecuted and is believed to have fled the country.

Today, to strengthen the Kedah class vessels, RMN had assigned Super Lynx helicopters armed with Sea Skua missiles.  While the missiles are battle-tested in the Gulf War, it lacked the distance and destruction power.

The screw-up from this black mark in RMN history can still be felt today, as today’s RMN lacks sufficient capable surface combatants.  Worse still, all 6 Kedah class vessels are still naked vessels, armed only with 76mm and 30mm cannons, when regional navies, even Royal Brunei Navy has since moved to arming missiles on their ships. 6 naked ships, if our Govt does not upgrade these naked ships, these would be coffins for our sailors with anything better than 76mm peashooter in the event of hostilities. 

Note:

In my next article, we would explore on potential threat to Malaysia.  Not going to be a nice topic, as not many people would like the acknowledge the ugly truth that not all of our neighbours love us.  

This would be followed by logistical consideration in procurement, which unfortunately seems to bizarrely escape the thought process when deciding which assets to be procured. 

Followed by diplomatic consideration, or in other words, preventing arms race and also war. 

The last article in this series, we will look into economic consideration.  This includes payment methods.  And finally, impact of politics in defence procurement.