Malaysia Shelves 12-Copter Deal

Malaysia Shelves 12-Copter Deal (NSI News Source Info) KUALA LUMPUR - October 28, 2008: Malaysia on Oct. 28 shelved a 1.7 billion ringgit ($470 million) deal to buy 12 military helicopters from Eurocopter because of the bleak global economy. "At the moment, we have decided not to purchase the helicopters," Prime Minister Abdullah Ahmad Badawi told reporters. "We need to delay it ... because of the financial crisis. We need to have money."

Cougar EC725 Helicopter

Abdullah's decision to scrap the deal for the 12 Cougar EC725 helicopters awarded to the European company is one of the government's first major cost-cutting move as it reprioritizes its budget to cope with the worsening global financial crisis. "We just cannot be borrowing every time. We need money," said Abdullah, who is also defense minister. "The best thing to do now is to reallocate our budget." He said the government would focus on spending on projects which generate income given the deteriorating economic climate. Eurocopter Group is a wholly owned division of European Aeronautic Defence and Space (EADS). The group's products account for 30 percent of the total world helicopter fleet. Eurocopter Malaysia has a regional maintenance facility near Port Klang, west of the capital, Kuala Lumpur. The company was awarded the contract last month to replace the defense ministry's fleet of 28 military Nuri transport helicopters. The move was criticized by opposition leader Anwar Ibrahim, who alleged there were irregularities in defense procurement. But Abdullah said selection of the Eurocopter was based on an open tender as stipulated by the defense ministry and according to the specifications of the helicopter. "I don't believe there are irregularities," he said. He said the Eurocopter helicopters could be used for search-and-rescue operations and combat, as well as transport. "Once the financial situation improves, we will buy," he said. "We need new helicopters to replace our aging fleet." Malaysia would review its decision to buy the helicopters in 2011, Abdullah said. The U.S.-made Sikorsky S-61 Nuri helicopter has been in use since 1968. Twenty-eight of them remain in the Malaysian air force, serving as its main transportation vehicle. The decision to phase them out was made after a fatal crash last year that killed six Malaysian troops.