Ismail Government Slammed For "Sham Open Tender" In New Multi-Billion Defence Controversy

Ismail Government Slammed For "Sham Open Tender" In New Multi-Billion Defence Controversy

Brigadier General Date Lau Kong Cheng knows a lot about defence procurement having acted as a consultant following his long career as a fighter pilot.

This week he has gone public over what he says is yet another defence contract stitch up after months of complaints that went to the very top of government but which he claims have been ignored.

If so, his allegations provide further evidence that the coup coalition of losing parties which overthrew the elected government in 2020 went straight back to their old corrupted practices in their scramble for cash.

A brief to the MACC sighted by Sarawak Report alleges “unscrupulous decisions” and “treacherous actions” amounting to “abuse of power” and “corrupt practices” that will deprive the nation of the best defence system and price:

The proper Open International Tender process for the 2 systems are not adhered to and have been deviously aimed and manipulated towards selecting pre-determined systems i.e. Anka UAS [drones] and FA-50 FLIT-LCA [aircraft]. This has prevented all Tender bidders from Fair, Transparent and Professional Evaluation and Comparisons of their Tender bid systems. These unscrupulous decisions and collaborated actions amount to abuse of power and are indications of corrupt practices. These treacherous actions, if not prevented may result in the nation being denied the choice of the best performing, most value for money, cost- effective and long term viable systems for future credible defence

The alleged pre-selection of the preferred bidders occurred, he says, despite a public pretence at operating an open international tendering exercise in line with the reforms introduced by the previous Pakatan Harapan government.

At issue are two massive airforce contracts set to be awarded by the Ministry of Defence. One for 36 fighter jets at RM8 billion and one for 3 drones at RM4-500 million. They were rushed into being following the coup (2020 for the drones and in 2021 the jets) by the then new defence minister, none other than Ismail Sabri, who has now taken over as prime minister.

The process was touted as being kept in line with the reforming anti-corruption procedures which had been introduced by the Harapan government and for that reason a wide slate of international competitors stepped into tender, including the China National Aero-Technology Import & Export Corporation (CATIC) represented by Brigadier General Lau.

However, by last November Lau has told Sarawak Report he had come to the conclusion that the so-call open tender process was just a “big show” put on for the public, when in fact it was “all hogwash a sham and a fraud”. 

The reason being that only two companies have been provided the opportunity to present a proper demonstration of their products – one is the Turkish Anka UAS model for the drones and one the Korean FA-50 FLIT-LCA for the aircraft – whilst the rest of the contenders have been sidelined and ignored.

This is despite Lau’s contention that his own company’s aircraft is demonstrably superior in terms of the specifications required and its bid is RM1.5 billion cheaper, priced at RM6.5 billion rather than RM8 billion for the 36 aircraft. “Illegal funding may soon be siphoned off from these overpriced projects” the Brigadier General predicts in his complaint to the MACC.

He had earlier written confidential letters of complaint detailing the unfair and non-competitive handling of the tender to all the top BN ministers, he says, including the prime minister, the present defence minister, Hishamuddin Hussein, and finance minister, Zafrul Aziz. Yet he received no replies and has therefore now issued a formal police report against the Air Force and its senior personnel and also made the report to the MACC.

The fact that no minister replied or acted on his concerns, says Brigadier General Lau, is a clear indication of complicity in what he describes as a fraudulent abuse amounting to yet another instance of massive theft through defence contracts. He told Sarawak Report:

“All are involved. No-one would dare do this unless it was allowed from the top. They had advertised that this would be a fair, professional and transparent open tender process, but in practice the winners have been pre-selected.”

The Brigadier General, who is an active supporter of the veterans association in Malaysia and is backing a former armed forces independent candidate at Setiawangsa, claims that in his observation the contract had been planned for completion in advance of the election, however the early polls had taken ministries by surprise.

“They are still pushing through the paperwork even though the election has been called so that the contracts will be set for signing straight after the victory they are hoping for.”

says Lau. This is despite the fact that his own company and all the other international contenders in the field have yet to be given a proper opportunity to demonstrate their rival bids. He says that his company has lost money and he too has lost time and money putting forward a bid that was never going to receive a fair chance of success. “My complaints have been ignored and the ministries have taken actions contrary to what I asked.”

Lau has named senior figures in his now leaked official complaints and pointed a finger directly at the top of government in his corruption claim. It is a brave stance which he says is entirely justified given that actions have failed to match the promises given and that genuine bidders have been betrayed.

Once again the truth is highly unlikely to emerge nor are investigations probable unless those parties who have presided over defence contract scandal after defence contract scandal in the past decades are again thrown out of office at the General Election next week.

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