Malaysia says report on warship deal speculative

Malaysia says report on warship deal speculative

KUALA LUMPUR (AFP): Malaysia's defense minister has dismissed
a news report which suggested Kuala Lumpur might use a proposed
warship contract as a trade weapon against Canberra.

A report from Canberra carried in local newspapers had cited
the Sydney Morning Herald as saying a leaked document from
Australia's Foreign Affairs Department, while backing a plan for
the joint construction of 30 patrol ships, raised fears the
contract might have unwanted trade implications.

"This is quite speculative. The Australians will be invited
like everyone else to submit a proposal and compete on a level
playing field," the minister, Najib Razak, told reporters.

He said all bids would be in by year-end and Malaysia would
decide on the award of the contract by mid 1995, with the first
ship to be built in Malaysia.

According to the Australian report, the ships are estimated at
148.8 million ringgit (US$59.5 million) each, making the contract
worth 4.46 billion ringgit. Eighteen of the 1,200-ton patrol
ships are slated for Malaysia.

Despite mutual benefits, "the possibility that the Malaysian
leadership could see the project as a point to apply pressure on
us could not be ruled out completely," the Herald reported.

But the report added that benefits outweighed risks.

The Australian Foreign Affairs Department refused to confirm
or deny the existence of the document.

Malaysia-Australia ties have undergone rough patches in the
last few years. Australian Prime Minister Paul Keating last year
had to apologize for calling his Malaysian counterpart Mahathir
Mohamad a "recalcitrant" for opting out of the summit of the Asia
Pacific Economic Cooperation forum in Seattle.