SHAH ALAM: Since the announcement of the government decision to lease twenty-eight helicopters for the ministries and agencies for 15 years for some RM16.6 billion much ink has been spilled to justify the deal. Much of it of course is just excuses. The latest excuse published as a written reply in Parliament stated that the programme will optimise government spending by distributing RM16.6 billion more sustainably over 15 years.
Law and institutional reform minister Azalina Othman Said in a a written parliamentary reply stated that the lease agreement covered maintenance, insurance coverage, and training for over 1,300 personnel, with a guaranteed minimum fleet availability of 85% for all agencies using the helicopters.
“Under this leasing model, the government does not need to bear any costs during the helicopter procurement phase,” Azalina was quoted by FMT yesterday.
Although she said the government will not bear any maintenance costs during the 15-year leasing period, it must be noted that we will be paying Weststar Aviation Services Sdn Bhd, the leasing provider around RM1 billion annually during that period. The government will of course be paying for the air crew, ground crew (needed to turn around the helicopters for its duties); fuel and other accidental costs.
From the twenty-eight, we know twelve will be the Leonardo AW149 helicopters for the Royal Malaysian Air Force (RMAF) with much of the rest to be a mixture of AW139 and Bell 429 helicopters. There is also the chance that the Army will be getting AW149 helicopters as well to replace the leased Black Hawks.
But do we know how much is the cost – inclusive of spare parts and other needs – to maintain a single AW149 or its civilian version AW189 helicopter annually? Before this we did not. Now thanks to a three-year contract between the government and Galaxy Aerospace Sdn Bhd, there is no need to guess anymore.
The LOA for the contract to Galaxy Aerospace is RM32,989,212.00. This means the annual cost for a single AW189 (9M-BOE) is RM11 million. The tender for this contract was published on May 15 and closed on July 9. And based on the contract it is likely the other AW189 in Fire and Rescue Department – 9M-BOF- which crashed during a post maintenance on July 22, 2023, has been written off.
The main specification of the contract:
This Technical Specification for Performance Based Maintenance Services and Comprehensive Support Contract Statement of Work defines activities, required outputs, standards for management, constraints and performance targets for the through life support of one (1) fleets Jabatan Bomba dan Penyelamat Malaysia (JBPM) which is AW189; multi use helicopters operated by the JBPM in Malaysia and the surrounding regions.
The expected annual flying hours for the GOVERNMENT operation (including training) will be in the average for AW189 fleet as follow: Fleet: AW189 No. of Helicopter: One (1) unit Minimum flying hours per fleet per annum: 300 hours/fleet/year (25 hours / month.
So based on the above, we know that the cost of maintaining a single AW149/AW189 for 15 years is RM165 million. Note that the actual figure will be higher as the aircraft ages. What ever it is, this mean for a 28-strong helicopter fleet (I am using AW149/AW189 as it is a bigger and more complex helicopter than the two other aircraft) the maintenance bill for 15 years should be RM4.62 billion. The contract could also be cheaper if the government rules allowed for the OEM to maintain the helicopter.
And as the cost of the AW149/AW189 (again as both are bigger and more complex aircraft) should be around RM150 million per aircraft, the total cost of procurement will be RM4.2 billion. Based on the above the figures, the cost to the government inclusive of the procurement and maintenance costs will be RM8.8 billion, which is half of the leasing programme.
It will be cheaper of course, as only half of the fleet will be the more expensive AW149/AW189 helicopters. It should be around RM6 billion inclusive of the maintenance costs, if we buy direct from the OEMs instead of a local agent. Do note, like the leasing programme, the payment for the procurement and maintenance would be stretched out across the whole life-time of the aircraft. so.
What about the benefits of the leasing programme such as transfer of technology, training of personnel, link-up with educational institutions and Malaysia becoming the hub for Leonardo helicopters for South east Asia as touted by the government then? Will we lose them if we buy the helicopters instead of leasing them? No, as the benefits mentioned above will also be part of a direct procurement programme as it is also part of the government policies. Why do you think it is an integral part of the leasing programme?
— Malaysian Defence
If you like this post, buy me an espresso. Paypal Payment
Great article Marhalim!!!
Just to add, this is the cost of 4x AW189 for BOMBA
https://t.co/1WQ1hKl6qf
RM530 million for 4 helicopters. That is RM132.5 million per helicopter.
3x AW139 HOM cost for TLDM
https://www.malaysiandefence.com/how-much-is-that-helicopter-in-the-window-part-2/
RM228 million for 3 helicopters. That is RM76 million per helicopter. That in itself, nearly half the price of the AW189.
Bell 429 price
https://chicago.suntimes.com/chicago/2024/08/16/chicago-police-helicopter-dnc
So for a full Police-spec Bell 429, it is about USD11 million each. That is about RM49 million each.
Okay, lets assume AW149/AW189 = RM140mil, AW139 = RM80mil, Bell 429 = RM50mil
The current 28 helicopter lease breakdown
12x AW149 (TUDM)
3x AW189 (APMM & JPM)
6x AW139 (TLDM & BOMBA)
7x Bell 429 (PDRM)
So the cost to buy all 28 helicopter outright
(15×140) + (6×80) + (7×50)
= 2100 + 480 + 350
= RM2.93 billion onlyyyyyy
So only RM2.93 billion upfront to buy those helicopters outright, with maintenance cost can be paid for every other 5 years.
A stab in the dark – did the army reject the AW149 lease behind the scene, which is why those 12 AW149 originally allocated for the army is now allocated to TUDM?
In any case, the RM16.6 billion lease cost is totally absurd. Even buying them outright and maintaining/servicing it them as usual will cost at most only half of the amount.
Burpppp…kenyang kroni
If they keep doing this, all the the belanja pembangunan will be gone, taken over by the belanja pwngurusan. So our defence budget will be 100% Opex. All the “industry players” on a secured gravy train concession.
My bad…
This is actually for APMM (not BOMBA), but the price still stands, RM530 million for 4x AW189
https://t.co/1WQ1hKl6qf
Like I said in my previous comment it might seem like a member of the Parliament Opposition is perhaps a reader here, bringing up pertinent questions about suitability of AW149 and others, and I really hope said reader will take this article and continue to put doubt onto the transparency of this Govt. This deal maybe their 1MDB after all.
“In any case, the RM16.6 billion lease cost is totally absurd.” can we find out how & why they get that rm16.6B?
The price of helicopter should be calculated as the government has option to buy at RM 1 after concession period
after spending some RM16.6 billion or some RM600 million each. And then we are liable for the RM11 million or higher as they are 15 year old aircraft, a year for its maintenance.
Can somebody help answer my question, what is the total price of the fuel needed to operate each helicopter for 300 flying hours (or per year so to say)? We should at this up to the maintenance cost and purchasing costs
Something tells me that the RM 16.6 billion leased could be Anwar’s LCS fiasco in the future. Way more money than the debacle from the LCS.
Fuel costs are AFAIK not included in usual long term lease contract.
The AW149 uses similar engines to the UH-60 Blackhawk, Surion.
So the rough fuel consumption should be similar to those 2 helicopters.
Feel free to look at the fuel consumptions of various helicopters here:
https://t.co/JKnqWZBxs6
total cost is absolutely absurd but i understand from the financial standpoint that it is easier to allocate a fixed amount 1 billion a year for the leasing of these helicopters. it will be a yearly budget for the gov’s opex, easier to manage with no surprises. whether these heli’s meet the specific requirements for the armed forces, that is another thing to discuss. i was hoping we could add at least another 12 of eurocopter heli for the army. well…what do i know…im just a defence enthusiast and an accountant by profession
@ lebai kedekut
So you can check if these numbers is believable right?
https://pbs.twimg.com/media/Gkh2xRZb0AAyUwu?format=jpg&name=4096×4096
12x EC725 price
https://www.malaysiandefence.com/mindef-explains/
3x AW139 price
https://www.malaysiandefence.com/how-much-is-that-helicopter-in-the-window-part-2/
12x EC725 maintenance contract for 5 years
https://www.malaysiandefence.com/bhicas-to-continue-maintenance-of-ec725s/