Malaysian Scorpene Submarine Corruption Case Legal Briefing

The Solicitors International Human Right’s Group (SIHRG) and Malaysian Human Rights NGO (SUARAM) will be hosting a briefing and fund raising event in relation to the French Scorpene submarine deal in which French giant shipbuilder DCNS is alleged to have paid millions of Euros in kickbacks to top Malaysian officials.

Joseph Breham, a renowned French lawyer from Sherpa, a non-profit organisation dealing with human rights legal issues and Cynthia Gabriel from Suaram will provide up-to-date briefings followed by an open dialogue session. William Bourdon, a colleague of Mr Breham, who is also part of the French legal team, was unfortunately deported by Malaysian authorities in July this year en route to speak at fund raising events in the Malaysian capital Kuala Lumpur. Please join us for what is bound to be an interesting and engaging evening.

Date : Friday 30th Sept 2011

Venue : Lecture theatre BPP Law School, 68-70 Red Lion Street, London WC1R 4NY

Time : Registration : 6pm Briefing and Dialogue Panel : 6.30pm-8.00pm

A nasi lemak supper will be on sale at the venue. All proceeds will go towards the legal fund. Admission is free but donations towards the legal case are welcome.

Please register at http://malaysianscorpenesubmarinecorruptioncaselegalbrief.eventbrite.com/

For further details pertaining to the case please see below:

http://malaysia-today.net/mtcolumns/guest-columnists/39450-malaysian-submarines-the-trail-of-retrocommissions-is-becoming-clearer

Briefing on the Scorpene Submarine Case

Chronology:

5 June 2002: Malaysian Government signed an agreement with French DCNS and Spainish Navantia for the procurement of two (2) Scorpene class submarines.

The procurement contract was through direct negotiation with the manufacturing companies, said to be with the service of Perimekar Sdn Bhd.

According to the Government explanation, the contract was divided into two parts:

a. Cost of two Scorpene submarines together with the package that covers Integrated Logistic Support and training amounted to Euro 969.15m (however on 14 May 2008, Najib told the Parliament that this part cost Euro 999.15)

b. Payment to Perimekar Sdn Bhd in the name of “coordination services” for a period of six years, the sum was Euro 114.96m

It is widely believed that payment for the second package was in reality the commission for Najib/Rosmah through Razak Baginda as the owner of Perimekar.

With the exchange rate at the time, the cost was equivalent to:

1) Payment for submarine cost between: RM 2.14b (Euro=RM3.2 in 2002) – RM 5.43b (Euro=RM5.6 in 2008) (nowEuro=RM4.7)

2) Commission: probably about RM 540m (exchange rate at the time of payment)

26 July 2006: Royal Malaysian Navy announced these vessels will be named after the first and second prime ministers. The first hull will be named KD Tunku Abdul Rahman and the second hull KD Tun Razak.

24 Oct 2007: The first vessel, KD Tunku Abdul Rahman was launched by then Defence Minister Najib on at the DCNS dockyard, Cherbourg, France.

(According to Sharribuu, Altantuya was in France with Najib during the launch)

3 Sept 2009: The first Scorpene submarine KD Tunku Abdul Rahman, arrived at a Port Klang naval base after a 54-day voyage from France. The second of the series, KD Tun Razak, is scheduled for delivery in late 2009. However it only arrived in mid 2010.

10 Feb 2009: It was reported that KD Tunku Abdul Rahman could not dive due to technical faults. The Navy sources admitted that the defect had prevented it from diving for three months. However the Government claimed that the problem was fixed in early February and it was allowed to undergo tropical water trial since then.

As a result, builder DCNS SA extended the warranty for the submarine, which was supposed to expire on 25 January 2010, until May 2010 so the submarine could complete its trials as the first step to obtaining its Initial Operational Capability (IOC).

25 May 2010: KD Tunku Abdul Rahman warranty expired.

2 July 2010: KD Tun Razak, the second Scorpene submarine, arrived at the Lumut RMN Base. It was more than 6 months behind schedule.

7 July 2010: Marhalim Abas of the Malay Mail again reported that Malaysian submarine crews had remained on dry land since the first arrival due to continuous problems of KD Tunku Abdul Rahman; the crews risked to lose their submarine rating for unable to participate any trial dive.

Both submarines are now parked at Sabah Sepanggar Naval base, to date neither of them had undergone the necessary tropical water trial dive.

What is the actual cost of the Scorpene submarines?

Agreement signed with DCNS/Navantia costed Malaysian taxpayer Euro 1.08b (with Euro 114.96m commission for Perimekar). Nonetheless, we later found out that the price did not include many items.

What are the missing items that need additional payments?

1. Maintenance services: Malaysian Government had awarded a joint venture Boustead-DCN Bhd (BDCN) as the services provider for the submarine maintenance. Until today the cost had not been finalized. Nonetheless, in June 2009 Boustead Heavy Industries in a statement to Bursa Malaysia informed that the government had expressed an intent to award a contract worth RM600 million to its joint-venture unit for in-service support for submarines.
March 2010: Defence Minister Zahid Hamidi clarified that for the first year maintenance would cost about RM270m and the annual maintenance cost will be capped at RM600m per year.

2. LIMA 2009: Defence Minister announced additional contract worth Euro37.5m (about RM150m) for the supply of Support and Test Equipment (S&TE) for Scorpene submarines.

3. Weapon not included: on 22 June 2010 Defence Minister answered parliament question revealed that the Government has paid Euro219.265m (about RM890m) for 40 units Exocet SM39 missile and 30 units Black Shark torpedo, to be delivered by 2013.

4. Infrastructure for submarine base in Sabah (not yet constructed)?

5. Training for crews, support staff etc. No price yet.



Grand total (rough estimate):

Hardware: two Scorpene class submarines RM 5,430m

Commission: in the form of services by Perimekar RM 540m

Package for simulation and training, S&TE RM 150m

Weapons: 40 Exocet missiles and 30 Black Sharp torpedo RM 890m

Total: RM 6.98b

Maintenance service (under negotiation) RM 270m (first year)/ RM600m (max)

Money spent to date RM 7.3b

If we add RM600m maintenance RM 7.58b (for 3 years)

Uncertain for repair cost to overcome defect RM ???