DAP demands probe into RM6.75b 'foolish defence decision'

Daily Express (13/9/07): The opposition DAP Wednesday demanded an inquiry into a billion-dollar defence scandal involving the purchase of patrol boats that were either not delivered or proved defective.

It said the probe should determine whether the Cabinet was "misled into making a foolish decision" in approving the RM6.75 billion deal.

"The 6.75-billion-ringgit offshore patrol vessels scandal is the largest single case of misuse of funds in the 2006 Auditor-General's Report," DAP Sec-Gen Lim Guan Eng said in a statement.

"Public interest requires a royal commission of inquiry as to how RM6.75 billion could be lost," he said.

Lim earlier called on Deputy Prime Minister Datuk Seri Najib Tun Razak, who is also Defence Minister, to investigate the deal.

He said the report had found the value of the contract should only have been RM4.9 billion. He added that only two of the six vessels had been delivered to date, and both were defective.

The order for the six boats was part of a RM24 billion deal signed in 1998 with the ship-builder, PSC-Naval Dockyard.

It was plagued by technical problems and delays, with PSC-Naval Dockyard seeking more money from the Government to complete the vessels.

In 2005 Malaysian conglomerate Boustead Holdings, which is controlled by the armed forces pension fund, bought a 30 per cent stake in the owner of PSC-Naval Dockyard.

Meanwhile, Indonesia's billion-dollar arms deal with Russia should not be viewed as negative for regional stability, said Prime Minister Datuk Seri Abdullah Ahmad Badawi.

Jakarta's plans to buy Russian-made equipment will beef up the country's defence capability and ultimately contribute to Southeast Asia's security, he said at the Forbes Global CEO conference here.

"I wouldn't see it as something that can bring about negative developments strategy-wise in Southeast Asia," he said in response to a question.

"All the countries in Southeast Asia need to strengthen their defence capability," Abdullah said.

"I think that's very important but we are not involved in any kind of arms race... therefore I do not see that as something that we need to worry about," he said.

Under the agreement, inked last week during a stop by President Vladimir Putin in Jakarta, Russia is providing a billion-dollar line of credit for Jakarta to use to buy its helicopters, tanks and submarines.

Malaysia has initiated a major arms build-up over the past few years, announcing deals for French submarines, British and Russian missile systems and Polish tanks among other equipment.

Australia has also said it does not feel threatened by Indonesia's military deal. - AFP

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