The negotiations between Malaysia and South Korean fighter jet maker Korean Aerospace Industries (KAI) for the purchase 18 jets have hit a roadblock, clearing the way for India’s Tejas to be the top contender. Sources in both India and Malaysia defense industry have confirmed to TOI that the finance ministry of the country has sent back the proposal on purchasing 18 FA-50 jets asking KAI to adhere to the base price of 3.5 billion Ringgit Malaysia.
KAI had pegged the price at RM 4.2 billion, way above the Chinese JF-17 price at RM 3.4 Bn and India’s indigenously built Tejas-MARK1, RM 3.75 Bn Royal Malaysian Air Force (RMAF), and the defense ministry had projected the FA-50s as the top contender despite the jets having lower manoeuvrability as they are essentially trainers adapting to combat roles, vis a vis Tejas which has inherent combat agility in its design, lending an edge during ‘dog-fights’ and against missile locks. Also, FA-50’s accident record of 6 crashes until now, from 2012 onwards, with recent ones in 2018, 2020, 2021 and the latest one reported in July this year, in Indonesia, was also overlooked.
According to sources, the RMAF sought an increased budgetary outlay from the finance ministry to accommodate the higher price of Korean aircrafts. “Instead, the ministry put up two caveats: first, the overall cost of KAI deal should be within the stipulated 3.5B RM; second, there should not be any dilution of the technical parameters submitted for the RFP (Request for Proposal) at the bidding stage,” said a defense expert in the know of Malaysia’s tender for modernizing it’s dwindling combat fleet. “Failing to meet these two pre-conditions would mean India’s Tejas, which outshines FA-50s on all counts, will be in the reckoning,” he added. While top officials from KAI are in Malaysia, engaging the defense ministry for new terms, local media is abuzz with allegations of kickbacks and commissions in this first open high-profile tender. So far, the preferred mode of major defense transactions in this country, be it Hawks, Su- 30s or submarines, has been G2G (govt to govt). But with 1MDB (1Malaysia Development Berhard) embezzlement turning into a huge poll issue and creating an anti-establishment wave in the country, lawmakers are wary. The recent sentencing of former prime minister Najib Razak in anti-graft cases and corruption charges and now the surfacing of LCS scandal involving Malaysia’s naval fleet renewal plan has drawn media attention to a nation trying to rebuild both the economy and its image in the post-Covid period. With the stalemate on pricing out in the open, RMAF is in a predicament.
KAI, in order to meet the base price, may dilute the qualitative requirements it promised during the bidding. This, on top of the already existing deficiencies of not having ‘Beyond Visual Range’ missiles engagements and air-to-air refuelling capabilities could be a deal breaker. Another route of tweaking the ‘Maintenance, Repair and Overhaul’ cost is by scaling down the support services in a manner that over time KAI gets back whatever it loses in the first stage. Experts consider both options as raw deals for Malaysia. Tejas, on the other hand, tops all the technical parameters. An existing HAL and National Defense University Malaysia MoU for research and training also add weight to Tejas’ bid.
-Report by Aradhana Takhtani