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Extra Allocation for Defence Ministry for 2024 Or Why We Went the Leasing Way

A RMAF A400M conducting air to air refueling with No 12 Skuadron Su-30MKM Flankers in 2019 as part of a weapon validation programme. RMAF

SHAH ALAM: The Dewan Rakyat on March 3 approved the Supplementary Supply (2024) Bill 2025. This bill authorises additional expenditure for services in 2024, amounting to no more than RM20,191,299.50 from the Consolidated Fund.

Finance Minister II, Datuk Seri Amir Hamzah Azizan, presented the bill, which was passed through a majority voice vote following debates by both government and opposition Members of Parliament. The bulk of the allocations are for operational expenditure, which are for the the Treasury’s General Services amounting to RM12,624,721,830, allocations to the Statutory Fund (RM3,151,419,300), Education Ministry (RM1,763,672,170), the Public Services Department (RM1,148,146,080), and Domestic Trade and Cost of Living Ministry (RM1,077,146,050).

Defence Minister DS Khaled Nordin checking out a Hornet undergoing Local Planned Maintenance 12 Years (LPM12Y) Programme at the Butterworth airbase on February 24 2025. Khaled Nordin picture.

The allocations also include the Higher Education Ministry (RM417,999,870) and the Election Commission (RM8,194,200). Also approved was supplementary funding for development expenditures amounting to RM RM2,308,070,450.

As for the Development Expenditure, the bulk of the supplementary funding are for the Finance Ministry (RM1,860,270,300); RM407,800,000 million for the Defence Ministry and RM40,000,000 for the Prime Minister’s Department. The money for the allocation has been used using funds under the Consolidated Funds so the approval was just a mere formality.

Anhow, according to the budget document, the extra allocation for the Defence Ministry was for the maintenance of aircraft and radars of the RMAF. As usual it did not give a detailed breakdown of the allocation. And usual the MPs during the debate did not really press the deputy Defence Minister Adly Zahari to give a detail breakdown of the funding or the justifications. They instead play to the galleries, pontificating about the leasing contract for the helicopters and other things. One even suggested that an airbase is built on Beting Patinggi Ali. I understand that they need to put out their messages across to the public, but it is also pertinent to seek out details especially when it comes to budget allocation.

Defence Minister DS Khaled Nordin on board tail number 07 inside a hardened aircraft shelter at the Gong Kedak airbase on January 21 2025. The minister was visiting the airbase to see for himself the Sukhoi SLEP.

Thankfully, in his reply, Adly gave some details about the extra allocation. He confirmed that the RM407.8 million extra allocation was for the maintenance of aircraft and radars but also payments for the procurement of the 18 Korean Aerospace Industries KAI FA-50M FLIT/LCA. He did not give a breakdown of the payments though.

In explaining the need for extra allocation for maintenance, Adly revealed that ministry has obligations for 52 maintenance contracts for aircraft and radars are worth RM1.4 billion annually but the ceiling for funding was RM800 million. Hence the need for the extra allocation.

He said the extra allocation was needed for the A400M fleet in 2024, which had brake problems leading to issues with the hydraulic system and tyres, as well. This was also the same for the FA-18D Hornets fleet when cracks were found the aircraft and components.

I believed the cap for the annual maintenance allocation (RM800 million) is likely one of the reasons that the government approved the leasing programme with Weststar Aviation Services Sdn Bhd. Again this is just an excuse. As they had approved the extra allocation to make up the difference, the government also has the power to increase the budget for the Defence Ministry to cover maintenance.

The relevant part of the debate on March 3 via the Hansard:

Seperti mana kita tahu bahawa bajet tambahan kita ini yang berjumlah
RM407,000,800 adalah terkait dengan dua perkara. Pertama, terkait dengan senggaraan
pesawat dan juga radar. Kedua, terkait dengan pembayaran perolehan Fighter Lead-in
Trainer ataupun kita sebut Light Combat Aircraft (LCA) fasa yang pertama.
Jadi kita seperti mana yang kita tahu, seperti mana yang disebut juga oleh Yang
Berhormat Tanah Merah tentang bajet kita di mana keperluan bajet di Kementerian
Pertahanan itu melalui penyelenggaraan sama ada radar mahupun pesawat kita yang
melibatkan 52 kontrak pertahanan ini menelan belanja hampir RM1.4 bilion setahun. Jadi,
kalau kita tahu bahawa siling kita setakat ini adalah sebanyak RM800 juta. Jadi, sudah
barang pasti kita cuba memanfaatkan bajet yang telah diberikan oleh Kementerian Kewangan
kepada kita tetapi dalam masa yang sama kita tahu bahawa ada beberapa isu yang
mengekang kita juga untuk memastikan bahawa kita memerlukan bajet tambahan.
Antaranya saya lihat bahawa kita di Kementerian Pertahanan memang kita
menggunakan garis 20 peratus daripada garis luar jangka kita tetapi kalau kita melihat kepada
apa yang berlaku sekarang di mana kita ada peningkatan antara 30 hingga 40 peratus luar
jangka ini yang melibatkan penyelenggaran kita. Sebab itu kalau kita lihat kita memerlukan
bajet-bajet tambahan ini. Contohnya kalau kita lihat macam A400, kalau kita lihat pada tahun
2024 kita menghadapi masalah brake dan kosnya agaklah tinggi kerana ia bukan sahaja
melibatkan brake tetapi melibatkan hidraulik dan juga keseluruhan daripada sistem tayar itu
dan ini memerlukan peningkatan kepada keperluan bajet kita.
Begitulah juga kalau kita lihat macam F/A18. So, kita boleh melihat bahawa kadang
kadang ia melihat juga kepada modul ataupun kerangka itu sendiri ada keretakan dan
seumpamanya. Mungkin tidak kita letakkan dalam bajet kita tetapi bila ini berlaku dia
sebenarnya memerlukan bajet tambahan daripada kita.

–Malaysian Defence

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Marhalim Abas: Shah Alam

View Comments (31)

  • How will you fit RM1.1 Billion extra for 15 years in the OPEX when your maintenance limit is just RM800 million?

    Normal maintenance if we direct buy is just about RM176.4 million only (this assume all 28 helicopter maintenance is as expensive as the EC725)

  • Also a reason why, for used assets, it would be good if we have extra airframes as spares, say 20% of the operational numbers.

    Cracked parts on the operational aircraft could be quickly swapped with those spare airframes. With zero cost.

    The cracked parts can then be repaired slowly (if the fleet is going to be used for quite sometime) off the aircraft, or just scrapped.

  • Nothing about Scorpenes or LMS b2?(Qamarul)

    Am just wondering when any top honcho in MinDef is going to consider buying a smaller sized modern sub if we aren't able to procure a full-sized sub. We need more subs so why not consider it.

  • These supplementary bills to unlock extra funding is what I believe then Najib Govt had wanted to use to coverup the shortfalls in the actual budget for LCS. This was the plan but was scampered when PH Govt did not play ball to give more funding instead froze the project for few years which then further increase cost.

    But I dont understand why FA50 buy needs supplementary money if it was ady budgeted in RMK. Would that also make this program actually cost more than the announced figure given to the public?

    • There was no way the shortfalls in the LCS to be covered in the supplementary budget. We will not know whether it will increase the cost or not unless there is a breakdown of the payments.

  • LCS was evidently underfunded from the get go, moreso when parts were used for lawatan sambil belajars & BNS upgrading. Unless the intention was for this project to fail, its very likely the core planners knew they had to get funds which doesnt create a sensation. This supplementary was hardly reported in mass media, and I guess only yours was reporting on defence portion.

  • Tain - "Am just wondering when any top honcho in MinDef is going to consider buying a smaller sized modern sub if we aren’t able to procure a full-sized sub"

    Despite advantages in technology there are still inherent issues with a smaller sub - less capable sensors, less space for weapons and fuel, less capable sensors, etc.

    Also what is a "full size sub"? The displacement of the Scorpene is ideal for our needs. A littoral boat as opposed to an ocean going boat like the Collins and Kilo.

  • Tain – “Am just wondering when any top honcho in MinDef is going to consider buying a smaller sized modern sub if we aren’t able to procure a full-sized sub”

    No one make a mini subs anymore (or not yet if turkeye STM to be believe). And if we were to pay R&D to build one we might end up paying the price of an off the shelf littoral subs for a mini sub. Just like how we bought the gowind "corvette" for the price of a *frigates.

    If the Turks do make one. I don't see why not. Thought as an addition rather than a replacement to a littoral subs.

  • Zaft - "No one make a mini subs anymore"

    They do. Look it up. The Italian company Cosmos use to deliver quite a few. Not all countries have a requirement for mini subs and there is a difference between a mini sub and a coastal sub. Taib was not referring to mini subs.

  • There are currently 3 countries making or promoting mini subs

    Korea, Italy & turkiye

    Korea for unnamed customers (HDS-500)

    Italy for Qatar

    Turkiye for unnamed customers (STM-500)
    https://pbs.twimg.com/media/FnuZnWaacAEBOe6.jpg

    https://pbs.twimg.com/media/FnuZpOYaQAEf4t_.jpg

    Right now I would prefer to get additional scorpenes 1st before getting any mini subs, but at 500toms displacement, they are as big as German Type 206 subs. With li-ion batteries, short ranged limitation of small subs like Type 206 could now be remedied.

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