SHAH ALAM: I am not a math whiz so if I got it wrong when deciphering the 2011 Budget, please correct me!
Try as I might I cannot find any exact reference as to how much money had been allocated in full to the defence sub-sector which is part of the National Security sector.
This is the main trust of the budget:
RM212 billion is proposed for the 2011 Budget which is 2.8 per cent higher than the allocation for 2010.
Of this, RM162.8 billion is for Operating Expenditure and RM49.2 billion for Development Expenditure.
From the Economic Report, it is stated that from the total budget of RM212 billion, 2.1 per cent is allocated for the National Security sector which according to my calculations (with thanks to my better half) is around RM4.2 billion.
The figure is confusing as the Report also stated that the Development Expenditure for the National Security sector is RM3.9 billion or 7.2 per cent. This is a reduction of almost RM100 or 0.8 per cent from the same period last year (RM4 billion).
From RM3.9 billion, RM2.7 billion is allocated for the defence sub-sector with the rest for the internal security.
The report did not mentioned any particular procurement programme apart from purchasing and upgrading of equipment, expanding surveillance and enforcement capabilities and better training for uniformed personnel.
Despite the confusion on the exact allocation for defence, we can safely conclude that money will be very tight for Mindef next year. Perhaps they will be luckier when the RMK10 is announced although from the above figures, I really doubt it.
–Malaysian Defnece
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View Comments (22)
Marhalim,
I think most of the RM2.7 billion DE is to pay what's due in 2011 on already committed projects such the A400M, EC725, Avibras MLRS etc.A small balance will be used to start the OPV 2nd Batch and the 8x8 AFV.Of course, the government need to support local economies, but I hope it will not completely turn a blind eye on the requirement of the RMAF for an effective Medium Range GBAD solution for its Sukhois and Hornet TUDM Bases, including the Scorpenes TLDM Base as well!
Marhalim: I was told the A400M payments are from the Rancangan Malaysia allocation, from both the Nine and Tenth. I believe the payments for the Cougar and Avibras will also come from the Rancangan Malaysia.
They can put anything they like in the RMK-10 like they did in RMK-9. We as the local defense scene observer can just wait and see how the future of the local defense will be like...
Syameer and All,
I think BNS and DEFTECH will get the 2nd Batch OPV and AFV 8x8 respectively in the 10th Malaysia Plan.Other local defence industries players such as SAPURA, AIROD, ZETRO, SMEO, SMEA,CTRM, Aero Tree, Saling Erti, Master Defence, Sydney Franklin & Sons Pte (UK), System Consultancy Svcs Sdn Bhd, CMCA, Anika Bekal, Peri Mekar and ATSC are well positioned in their respective sector as they have ongoing DE and OE contracts with Mindef.Small companies doing agency work for foreign OEMs will find the going tough as the small DE budget indicates that there will be no major procurement in 2011 except perhaps the OPV and AFV 8x8.
In today's Utusan Malaysia, Minister Dato Ahmad Zahid Hamidi is quoted as saying that Mindef gets RM9 billion in 2011.I think what he is referring to is the total Mindef DE and OE budget allocation for 2011.The RM4.2 billion for the Security Sector as announced by PM will probably still stands, with Mindef probably getting 50-60% of it.
My observation is that the reduced DE allocation will have a serious impact on the combat capability development of the MAF.To start with, the lack of an effective GBAD for the Sukhoi, Hornet and Scorpene Bases will make their potential combat capability meaningless, for they can be taken out in a matter of hours.The latest deployment of Sukhois 30 (eventually it will be 18xSukhois) by our neighbour will make our Scorpenes even more vulnerable in its current base in Sabah.
The PAT together with the PTD, PTL and PTU should speak together as one voice and advise the PM and Defence Minister of the serious vulnerability faced by our Sukhois, Hornets and Scorpenes.I have full confidence that they will do something about it, if our military leadership make clear of the need to resolve the GBAD issue before embarking on any other projects in 2011.I am sure they would do the right thing if the full facts are known to them.
Marhalim: I believe the RM9 billion is the Operational Expenditure as the DE expenditure had been included in the Economic Report. RM9 billion sounds like a big sum but one must remember that the Armed Forces had gotten a lot of new hardware within the last three years.
Both Datuk Seri Najib and Zahid know the problems faced by our forces...
Brother, you bet Najib and Zahid know very well the character of the Military big bosses.
It is about time that the assets within the MAF to be properly audited and reorganize befitting the budget allocated and the leaderships be more professional and accountable. They? need to look at the forces in being rather than embarking into more procurement, after all how much is their relevancy in the nation building!!! or do they want to be relevant or just be a "gold mine" as alleged by one of the military top bosses.
Someone said of the serious vulnerability of the Sukhois-well! thought it was vulnerable right from its inception!
Dear Marhalim,
I have no doubt that the PM and Defence Minister are fully aware of the problems faced by TD, TLDM and TUDM since they would be the first to be informed of their procurement requirements through the normal bureaucracy. But these procurement lists are submitted individually by the Chiefs direct to them. So the PM and Defence Minister are informed of the procurement requirements at the level of TD, TLDM and TUDM only and not at the level of national defence.The PAT should advise the PM and Defence Minister on the order of priority based on the immediate operational defence needs. If such advice is absent, who can blame them for giving preference to locally generated projects such as the OPV and AFV 8x8 over other projects, even though they are vital to the survivability of the Sukhois, Hornets and Scorpenes.We should not be so unintelligent and foolish not to recognize the need to protect our high-value Sukhois, Hornets and Scorpenes assets from potential air attacks.They are most expensive assets and would be foolish if we do not take immediate steps to insure them.
Marhalim: Boustead has got the LOI for 2nd Gen NGPV now called LCS. But they has not agreed the technical details yet. I am guessing that the contract will be signed at Lima next year...
we will just have to make do with what we are given. If there is a 1.5 billion shortfall compared to last year, the only logical thing to do is to cold storage certain assets, while extra mobilising the other. What assets, its the best knowledge of the peop;e in the government to know hehehehehheh
As such i doubt the 8x8 afv will get priority , not untill 2012/13 or after election. But the OPV they may kick start another 1 or two within next year.
So i would not even dream of another MRCA nor medium range GBAD.
Marhalim
You are confused because the budget speech is for 2011 and the economic report is 2010 estimated figure.
Indeed, no funds for the needy [yet again!] Marhalim.... But no surprises here, we all knew 2011 was going to be extremely tight, as far as cash allocations. Until the PM ensures that the next GE will not result in Putrajaya having new occupants, there a ZERO chance of this government awarding a major defence deal. I wish I had saved the link, but there was an online article by a local NGO who even suggested we scrap the MAF and concentrate solely on development! There are also those who believe that because a full scale conflict is very unlikely, we should put a freeze on all arms purchases!!!
Whilst there indeed is a need for our bases to at least have a minimum GBAD capability, does the present threat enviroment justify it? We are more likely to be hit by a pirate attack in our waters or have foreign naval or fishing ships intruding our waters before our bases are hit by a surgical air strike. The MAF shopping list is long and funds are scarce, so where to start?? I believe we should start with getting the basics right and investing in gear that is presently needed to cope with EXISTING threats rather than worry about what will happen if one of our neighbours decides to wage war on us. I believe that stuff like UAVs, a Nuri replacement, arming the 6 Kedah class, etc, are more practical at present rather than medium range missiles...
loreng.... As Marhalim said, the PTD, PTU, PTL, PM and Defence Minister are fully aware of what is happening with the MAF. It is not a case of the top brass not informing the political leadership. I wish I shared your level of confidence though with our leadership, honestly I don't!!. Our political leadership continues to gamble with national security and will continue to do so.
Making matters worse is the fact that the average Malaysian wants to hear about schools and highways being built, government aid for the needy, that basic prices of basic food commodities remain stable, that the MACC continues to apprehend the corrupt,etc,.... they dont want to hear about defence and can we blame them given that defence awareness in this country is low?
Marhalim: A new defence policy is supposed to be made public on Nov 8. Maybe we can learn something on the direction of the armed forces in the future. I hazard to guess that the present leadership and even the opposition does not believe there a country in the region will dare to resort to war for territorial advantage or whatever. So we will end up paying for 100 storey towers and city trains.......
Kosmo newspaper today 19/10/2010 Boustead annouced that the have received LOI from the govermment for 6 nos. of the OPV/LCS... Guess a piece of the cake from 2011 budget has been grabbed by Boustead...
Marhalim: Read carefully the press release. They just signed an LOI not the LOC and Contract yet, The money for the Second Batch of the Patrol Boat project will come from the Rancangan Malaysia Ke 10 and 11.