Malaysian Defence
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“He or she will also have to deal with the fall out by the government’s decision to build all four LMS in China instead of the original plan.”
fallout like what?
i’m glad to see TS Ahmad Kamarulzaman on board.
MRSS? It depends. Cost of building in Indonesia is even cheaper than China. If we go for Makassar class, it will be much cheaper to CBU from Indon. Based on LMS experience, it is likely the lower cost of fully building them there will sway Menhan decision heavily in that favour.
@zack
“fallout like what?” Boustead share prices drop. Stock markets are sensitive to potential loss of future revenue (ie when a business deal for Boustead -such as LMS- gets cancelled). This downturn in share prices will remain unless they have new projects to replace the cancelled build of LMS.
@zack
Less money for local builders. Little concern in defence area; much concern for the commercial performance of our “military-industrial complex”.
@Joe…
I hope other shipbuilders in-country will be given the chance to build the MRSS. I’ve got nothing against the Indonesian but respect. But I hope the contract will not go to Indonesia’s PT PAL. Why not explore the other shipbuilders say Shin Yang from Sarawak or the others based in Sabah and Labuan? It can’t always be Boustead or Destini for crying out loud. If UAE Navy can see it fit to allow Shin Yang to build 2 LSTs for them, by the same token these small-medium sized shipyards should be allowed some leeway in bidding for these huge local projects. Perhaps in collaboration with yards from overseas. Boustead didn’t get to build the Meko and Gowind class ships on their own.
So maybe it’s time MinDef can throw the bone in other directions, preferably with meat on them! And buy favours in Sabah & Sarawak in the process.
Reply
Personally I think we don’t have enough money to give the bones like we used to. We should stop using money for the military to support national aspirations. Just select a good shipyard and let them build it according to the budget
@Taib
The problem is, does Shin Yang or any other shipyards have a MRSS design that can be tailored to TLDM requirements? Boustead itself isn’t the problem. They are neither the originator of those ships they are building (think of it as contract assembler). Even if Menhan decides Boustead & Destini has got enough and decides to award the local build to other shipyards, they still need to source the design of MRSS from somebody be it PT PAL (Makassar) or Naval(Mistral) or Daewoo(Dokdo).
If the design selected comes from a higher income nation (France, Korea, etc) then it would be cheaper to locally build them here and I think it would be the obvious route for Menhan.
But what if Makassar was selected? Building it in Indonesia by PT PAL’s own shipyard would certainly be cheaper than any shipyard we have (Shin Yang, etc). If looking purely at cost, it would be a nobrainer to get them built at Indonesia, which means no business for ANY local shipyards unless they can compete in price (highly unlikely!).
This hard reality should have spurred the local shipbuilders to come up with their indigenous designs for MRSS. It may be more slightly more expensive than Makassar but I think the extra cost can be justified to support the local defence companies (like Sapura & T7 Global). However at the moment, I’m not so optimistic as I haven’t seen anything substantial so far from them, at least not in DSAs that I been to.
@joe
“If the design selected comes from a higher income nation (France, Korea, etc) then it would be cheaper to locally build them here”
Possibly, but not necessarily, because the local shipyard and workforce would not be as capable or as familiar with the design compared to eg the French and Korean builders. Furthermore the imported components eg French and Korean electronics would need to be shipped here. In the end these additional costs may offset any savings from lower local wages
Also you’ll have to raise a local workforce that isn’t currently on the rolls, spend time and money to train them, upgrade facilities and have no lasting payoff beyond the project because our orders are so infrequent and people will have leave for other employment.
@Chua @AM
If that is the case, then there is lesser reasons for building Makassar in Malaysia (if it was selected).