Malaysian ban on British firms hits Russian MiGs

Malaysian ban on British firms hits Russian MiGs

KUALA LUMPUR (Reuter): Malaysia's ban on buying British products or services has found an unlikely victim -- the Russians, who are selling 18 MiG-29 fighter-jets to the government, industry sources said yesterday.

Russia needs to replace some power equipment on the fighters with British-made parts to meet Malaysian specifications, but cannot because of Malaysia's ban on government contracts with British firms, the sources said.

The Russians are now looking to Spanish or Danish manufacturers to supply the auxiliary power units (APUs) and other ground equipment for the MiG-29s.

"It is a pity. The British APUs are smaller, efficient and cheaper than those made by the other countries," one source told Reuters.

However, he said the search for a replacement for the British APUs has not affected the on-going negotiations for the 1.6 billion-ringgit (US$597-million) purchase of the MiG-29s, which it intends to pay for in cash and palm oil.

Angered by British media reports that Anglo-Malaysian arms deals were tainted with corruption, Malaysia banned new government contracts with British companies two months ago.

It is, however, taking delivery this year of 28 Hawk fighters from Britain under a 1988 arms deal worth one billion pounds ($1.5 billion). The deal has been at the heart of an "arms-for- aid" controversy in Britain that helped sour British-Malaysian ties.

The British government has said the arms deal was briefly entangled with negotiations with Malaysia on providing a 238- million pound ($351-million) soft loan to a hydro-electric dam.

Malaysia is the first Southeast Asian nation to acquire the MiG-29s. Apart from the MiG-29s and the Hawk fighters, Malaysia has also bought eight U.S-made F/A-18 fighters.