Pressure mounts on government to come clean on multi-billion ringgit helicopter lease

Pressure is mounting on Putrajaya to explain its move to spend RM16.5 billion on leasing 28 helicopters for use by various government agencies, a move that further fuelled calls for an investigation after many linked the company involved to a tycoon who provided a helicopter to Prime Minister Anwar Ibrahim during the general election two years ago.

Last week, Weststar Aviation Sdn Bhd, a company owned by multimillionaire Syed Azman Syed Ibrahim, signed a 15-year lease agreement with the government to supply Leonardo helicopters for the armed forces, police, firefighters and maritime enforcement, as well as the Prime Minister's Department.

The agreement is described as the largest single lease of helicopters by the government.

The last time an acquisition of helicopters on this scale was made was in the 1960s with the purchase of more than 40 Sikorsky S61 A-4 Nuri helicopters for the Royal Malaysian Air Force (RMAF).

Anwar, in announcing the lucrative lease deal with Weststar last month, had claimed that it would save the government "billions" of ringgit, adding that the decision to appoint the company was due to its existing relationship with Italian helicopter manufacturer Leonardo.

Criticism of the deal has centred on the price itself.

Critics point out that purchasing new helicopters would only cost the government RM1.5 billion, adding that it would also come with a three-year warranty and a continuous supply of spare parts.

Former deputy defence minister Ikmal Hisham Abd Aziz described the deal as one of the biggest asset acquisitions in the country's history and said details of the contract should be made public.

"The public has a right to know more details.

"Helicopters supplied to agencies such as the RMAF and the Navy must meet the specifications or service requirements," he told MalaysiaNow.

As an example, Ikmal cited that RMAF currently utilises EC275 helicopters manufactured by Eurocopter.

"With this lease agreement, the RMAF will receive the AW139 helicopters. The personnel involved need to be prepared through training and courses," he told MalaysiaNow.

Ikmal, who heads the defence portfolio of Perikatan Nasional's shadow cabinet, agreed that buying a new helicopters would be better.

An industry player who wished to remain anonymous, said it was common for companies to supply assets to the government by "marking up" the total price, factoring in the cost of maintenance, specialised training and new safety technologies.

He said that in this way the supplier protects itself from potential losses.

"This means that a company buys new equipment that is leased to customers and still not suffer losses if the lease is not renewed," he said.

"On the contrary, it will still make a profit because the price has been marked up," he told MalaysiaNow.

MalaysiaNow is trying to get an explanation from Weststar whether such a practice was also used by the company to arrive at the RM16.5 billion price.

However, defence analyst Muhammad Fuad Mat Noor supported the government's move, saying the 28 helicopters are urgently needed and will be deployed within a specific timeframe.

He said as the Malaysian defence industry still lacked the necessary expertise and training to maintain helicopters and other defence assets, renting and leasing was the best option.

"We have spent billions of ringgit on the littoral combat ship (LCS) project, the original cost of which was (almost) RM12 billion.

"We tried for over 10 years to acquire defence assets at the cost of RM12 billion and what did we get? That's the problem," he told MalaysiaNow, referring to the controversial LCS project.

Meanwhile, the leasing deal has sparked a fierce debate online, with many political commentators and social media users citing it as the latest example of the Anwar government's lack of transparency.

Many also recalled that Weststar allowed Anwar to use one of its helicopters for Pakatan Harapan's general election campaign in 2022.

Political blog Malaysia Flipflop pointed out that the price tag for a new helicopter was about US$16 million (RM70.6 million).

"28 new helicopters cost RM1.98 billion with three years warranty and easy access to spare parts," it said, while questioning the silence of Cabinet members on the deal.

"Weststar Aviation won a RM16.5 billion contract to lease 28 helicopters to the Malaysian government for 15 years. That's almost RM40 million a year for each helicopter," wrote Gabriel Walter on the Sarawak Awareness Group, a Facebook discussion page on Sarawak issues.

Another critic compared the leasing deal to the purchase of 32 Leonardo AW149 helicopters for the Polish army.

Details published by Leonardo in June this year show that the Polish government spent €1.76 billion (RM8.2 billion) on the purchase, which included various packages such as spare parts and comprehensive training.

"The contract for 32 AW149s, worth PLN 8.25 billion (approximately €1.76 billion) includes logistics, training and simulator packages.

"The logistics package includes a stock of spares and consumable parts, as well as equipment for the ground handling of the helicopters. The training and simulator package includes comprehensive training of pilots and technical personnel and the delivery of a set of advanced simulators and training equipment," Leonardo said in a statement on June 4.