Thursday, February 10, 2011

The Six Billion Ringgit Question

Recently the Ministry of Defence announced its intention to acquire six SGPVs (Second Generation Patrol Vessels) in order to strengthen the Royal Malaysian Navy. The programme was budgeted to cost RM6 billion...definitely a huge sum of money whichever way you look at it. However, that announcement provided the ammunition for the Opposition to start blasting the government. Mr Tony Pua of DAP alleged that that purchase price, which is RM1 billion per ship was 'over-inflated' by as much as 870%! He quoted that similar ships, such as the Irish Roisin-class cost RM103m, Greek Super Vita (Roussen-clas) (RM329m), German K130 (Braunschweig-class) (RM572m), the 'at war' Israeli Sa'ar 5-class (RM791m) and even the US Littoral Combat Ship (RM913m). The supporters of them quickly nod their collective head while firing off in the 'Net. And as usual, their buzzwords are 'corruption', 'crony', 'why do we need more weapons?' and similar words and sentences.

Impliedly, they allege that there is hanky-panky around that humongous price inflation. They present evidence in the shape of the price paid by other countries who use similar ships. On the surface, yes it seem so, especially when we compare the price paid by the other countries. However just like an iceberg, there is more under the surface, which the esteemed Mr Pua chose to ignore...shall we examine them?

1. The term PV (patrol vessel). Despite the designation the ships are to be armed to the teeth, ready to fight off enemy warships, not chasing after some smuggler's sampan or illegal immigrants' tongkang (according to certain quarters in a well-known local online forum). In actuality they are corvettes or light frigates - I believe the decision to designate the ships as 'patrol vessels' was a political one, to avoid accusations of arms race. Even so many thought that the SGPV REALLY are 'patrol vessels' and thus are overpriced for their supposed job of going after smugglers, pirates and illegal immigrants.

2. As I have stated before, purchasing weapons systems is not the same as buying your groceries. Sardines are sardines whatever their labels...if you're skint, buy the cheaper ones. Weapons systems such as ships are different matter altogether - you simply can't look up on Wikipedia and start comparing prices! As Dzirhan  Mahathir said in his Facebook page, a corvette is a ship which displaces anywhere from 500 to 2000 tons with various permutations of electronics and weapons fit, speaking of which.....

3. Tony Pua made that 'apples vs oranges' comparison (or according to Dzirhan Mahathir, comparing between a Mini Cooper to a 4WD). Here are the specs of the various ships he quoted plus Dzirhan's humorous additions (in italics)! [Prices in USD]

Proposed Second Generation Patrol Vessel (Malaysia)
Meko A100 concept
DCNS Gowind concept

Displacement: 2000 tons
Length: 99 meters
Contract date / price per unit : 2011/2012 / USD329 million
Weapons: 76mm gun (OTO?), light autocannon (20/30mm?), SAM (RAM? Aster?), Anti-ship missiles (MM40 Exocet?), ASW weapons (324mm torpedoes?)
Aircraft Support Facilities: Helipad/ hangar for ASW/Multipurpose Helicopter
Main Role: Frontline warship
Ancilliary Role: Annoying Indonesia by patrolling disputed waters, annoying the Opposition by being build by Boustead Naval Shipyard (BNS) (BN = Barisan Nasional, get it?)

Roisin class Offshore Patrol Vessel (Ireland)

Displacement: 1700 tons
Length: 78.9m
Contract date / price per unit : 1997 / USD34 million
Weapons: 1 x OTO 76mm, 4 x 7.62mm GPMG
Aircraft Support Facilities: None
Main Role: Fisheries/ EEZ Protection, SAR, maritime enforcement
Ancilliary Role: Proving the Irish are still relevant outside rugby, St. Patrick's Day and Irish jokes
Differences from SGPV: 13 years ago price, guns only (OK make it 1 gun and 4 machineguns), 700 tons lighter, 11 meters shorter, no helicopter facilities.

K130 Braunschweig class Corvette (Germany) 

Displacement: 1,840 tons
Length: 89m
Contract date / price per unit : 2001 / USD 185 million (Pua quoted USD108 million)
Weapons: 1 x OTO 76mm gun, 2 x Rheinmetall MLG 27 27mm cannon, 4 x RBS-15 anti-ship missiles, 2 x RAM CIWS
Aircraft Support Facilities: mine-laying capability, helicopter hangar for 2 UAVs
Main Role: surface combatant, supplementing Gepard-class FAC(M)
Ancilliary Role: Scaring the French when it cruises in the English Channel
Differences to the SGPV: Minelaying capability, no conventional helicopter hangar, no ASW capability, 300 tons lighter.

Protector-class Offshore Patrol Vessel (New Zealand)

Displacement: 1,900 tons
Length: 85 m
Contract date / Price per unit : 2004 / USD70.5 million (but could get higher according to NZDF)
Weapons: 1 x MSI DS25 / M242 Bushmaster 25mm cannon, 2 x Browning M2HB 12.7mm HMG
Aircraft Support Facilities: Flightdeck and hangar for ASW/GP helicopter
Main Role: Maritime surveillance / EEZ enforcement
Ancilliary Role: Saving Middle Earth from seaborne invasion (no need to enlist the help of the Army of The Dead)
Diffrences to SGPV : light guns only, ASW capability rests with embarked helicopter only, 300 tons lighter, 10 meters shorter

Sa'ar 5-class Corvette (Israel)

Displacement: 1,275 tons
Length: 85.6 m
Contract date / Price per unit : Early 1980s / USD260 million. But bear in mind the special US-Israeli tie which may help the Israelis in securing a favourable price plus most of the electronics and combat system plus the Barak SAM are locally-built which may help keeping the costs down
Weapons: 8 x Harpoon ASM, 1 x Phalanx 20mm CIWS, 8-cell Barak SAM, 2 x Mk32 324mm torpedo tubes
Aircraft Support Facilities: helicopter deck and hangar
Main Role: Frontline warship
Ancilliary Role: Inviting attacks by anyone who hates Israel (missile magnet for Hezbollah or just anyone who have access to anti-ship missiles!)
Diffrences to SGPV : Some 700 tons lighter, 10 meters shorter, virtually gunless, possible favourable price (not to mention 20 years ago).

Super Vita (Roussen) - class Fast Attack Craft (Missile) (Greece)

Displacement: 580 tons
Length: 62m
Contract date / Price per unit : 2000 / USD108 million
Weapons: 8 x MM40 Exocet ASM, 1 x RAM CIWS, 1 x OTO 76mm gun, 2 x OTO 30mm autocannons
Aircraft Support Facilities: None
Main Role: Fast Attack Craft
Ancilliary Role: Discouraging the Turkish Navy in the Aegean
Diffrences to SGPV : 1700 tons lighter, 30 meters shorter, no ASW capability, no helicopter facility, different class altogether.

Littoral Combat Ship 1 (Freedom-class) (USA)

Displacement: 3,000 tons
Length: 115m
Contract Date / Price Per Unit : 2005 / USS Freedom (LCS-1) costs USD637 million. Rest of the class could be between USD430 million to USD440 million.
Weapons: 1 x 57mm gun, 2 x 30mm autocannons, 4 x 12.7mm M2HB HMG, 1 x RAM CIWS, N-LOS missile
Aircraft Support Facilities: Flight deck and hangar for 2 MH-60 helicopters and UAVs
Main Role: Operations in the littoral zone
Ancilliary Role: Showing that there are always money available at the Pentagon
Differences to SGPV: HEAVIER and L-O-N-G-E-R than the SGPV. Weapons and aircraft support facilities comparable to SGPV. Actually MORE EXPENSIVE than the SGPV

Littoral Combat Ship 2 (Independence-class) (USA)

Displacement: 2,784 tons
Length: 127.4m
Contract Date / Price Per Unit: 2005 / USS Independence (LCS-2) costs USD704 million. Rest of the class could be around USD430 million to USD440 million
Weapons: Guns fit similar to Freedom-class, 1 x SeaRAM CIWS, modular weapons fit
Aircraft Support Facilities: As Freedom-class
Main role: As Freedom-class
Ancilliary role: As Freedom-class
Differences to SGPV : See Freedom-class

So, there you have it. While indeed the most of the prices quoted by the well-versed Mr Tony Pua is spot on and lower than the one projected for the SGPV project, all of them are for ships smaller than the SGPV and in most cases, less capable. Furthermore most of the contracts were signed a number of years ago and in the case of the Israeli Sa'ar 5-class, more than 20 years ago! I mean come on, even the price of roti canai was different just a couple of years ago! Even worse, the number-challenged Mr Pua also said that the LCS Project cost less than the SGPV...well I'm not sure in what Universe does 329 million is LARGER than 440 million....

Anyway, even with these hard numbers, I don't believe Mr Pua's supporters would detract from their position. Well what do you expect from people who said that the SGPVs are only to be used for 'fighting pirates and smugglers' (which by the way, is the job of the Malaysian Maritime Enforcement Agency - have they never heard of this Agency? Even if the Navy is involved, they would rather use the smaller, more maneuverable CB90 HEX fast boats), our submarines are second-hand and cannot dive (they were submerged a number of times during their journey home from France and Spain and have fired their missiles while submerged) or that RM314 million is enough for this year's defence budget (conveniently forgetting that the allocation for defence also covers regular maintenance costs of existing items and even staff pay!)

Thanks to Dzirhan and Mumuchi for providing the facts and figures.

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