Malaysia inks $364 million missile deals, wants subs

Malaysia inks $364 million missile deals, wants subs

Eileen Ng, Agence France-Presse, Kuala Lumpur

Malaysia on Wednesday ordered British and Russian missile systems
worth US$364 million to boost its air power and agreed to buy its
first ever submarines, but denied the shopping spree was
aggressive.

The government, which has long harbored ambitions to establish
a submarine fleet, agreed to order three French vessels in its
maiden subs deal, official sources said. Jane's Defence Weekly
has put the deal at $1.05 billion.

The defense ministry sealed a 220 million pound ($316 million)
contract with European consortium MBDA to buy the JERNAS short-
range missile system to form a new air defense regiment.

It also inked a $48 million deal with Russian state-owned
company Rosoboronexport for the IGLA air defense system on the
sidelines of a major Asian defense services exhibition here.

The two contracts came a day after the ministry signed three
agreements worth 304.65 million ringgit ($80.2 million) to buy
assault rifles and equipment in the first round of a defense
shopping spree.

Malaysian Defense Minister Najib Razak, who witnessed the
signing ceremony, told reporters that the Russian and European
orders were expected to be delivered within three years.

Najib said JERNAS, the only air defense system that can be
used in all weather conditions and can combat small targets,
would significantly boost the air force's "credibility and air
power."

IGLA, which involves portable shoulder-launched missile
systems, would complement the British-designed JERNAS and be used
by the Malaysian infantry, he said.

The government has also announced plans to buy more than 60
tanks from Poland and is considering a deal to buy Russian Sukhoi
SU-30 fighter jets.

Malaysia has dismissed fears of a regional arms race, saying
its weapons procurement is not designed to attack perennial rival
Singapore or any other country.

Singapore already has four submarines, designed and built in
Sweden.

"We are not competing. We are doing it our way. It's part of
our modernization program," the defense minister said.

Asked about plans to purchase submarines from French state-
owned warship builder DCN International, Najib said: "I cannot
confirm, neither can I deny."

Government sources, however, told AFP that the defense
ministry last month signed a letter of agreement with DCN's
Malaysian agent, the Perimekar company, to buy three subs.

The firm has been given three months to finalize details of
the contract, which could involve a spin-off deal to give
Malaysia Airlines more landing rights in Paris, the sources said.

The Malaysian carrier currently flies thrice a week to Charles
de Gaulle airport in Paris but wants to increase the frequency to
five times a week, they said.

Apart from DCN, Germany's Howaldtswerke-Deutsche Werft and the
Netherlands' RDM Submarine were also believed to be bidding for
the contract.

DCN executive vice-president Henri de Bronac told AFP
Wednesday that talks to transfer an overhauled ex-French navy
submarine, the Agosta 70, for initial training and two new
Scorpene-class submarines were coming to an end.

"For many months now, we have been negotiating for the supply
of the Scorpene submarines and training for Malaysian navy
officers. The negotiation is coming soon, we hope, to a final
point," he said.

Asked about the airline issue, he said: "We know there are
some discussions on that but we are not handling that part."

The new-generation medium-sized Scorpene-class submarine is
developed by DCN in collaboration with Spanish shipmaker Izar.