Opposition Leader Datuk Seri Hamzah Zainudin has been outspoken in criticising the lease agreement, arguing that buying the helicopters outright would have been more cost-effective.
SHAH ALAM - The government’s decision to lease helicopters for defence purposes has triggered renewed scrutiny of the country’s defence procurement practices, stirring debates in Parliament and among experts.
The controversy began with the leasing of 28 AugustaWestland AW139 helicopters for RM16.6 billion over 15 years.
The deal has divided opinions on its cost-effectiveness, transparency and alignment with national defence policies.
Opposition Leader Datuk Seri Hamzah Zainudin has been outspoken in criticising the lease agreement, arguing that buying the helicopters outright would have been more cost-effective.
He compared Malaysia’s deal to Poland’s purchase of 32 AW149 helicopters for approximately US$1.83 billion, suggesting that Malaysia’s leasing arrangement is overpriced.
Hamzah, who previously served as Home Minister, pointed out that the Perikatan Nasional (PN) government had rejected a similar leasing plan after internal studies showed that purchasing would have been the cheaper option.
His concerns are further fueled by past vehicle leasing contracts under the PN administration, which approved higher-cost deals despite cheaper alternatives.
Prime Minister Datuk Seri Anwar Ibrahim, however, defended the decision to lease, arguing that it ensures transparent negotiations through government-to-government (G2G) agreements, avoiding the potential for corruption involving middlemen.
Anwar, who also serves as Finance Minister, emphasised that while buying the helicopters outright might appear cheaper at first, the long-term maintenance costs could end up exceeding the purchase price.
Leasing, he argued, offers flexibility and reduces financial strain, particularly during challenging economic times.
Expert insights on defence procurement practices
Defence procurement in Malaysia has long been marked by inefficiencies and governance issues.
Universiti Utara Malaysia research fellow Associate Professor Dr Bakri Mat stressed the importance of aligning procurement decisions with national policies, such as the Defence White Paper (DWP) and the National Defence Policy (NDP).
He warned that long-term leasing could eventually cost more than outright purchases, creating unnecessary financial burdens.
Purchasing defence assets could also benefit the local industry by fostering growth, job creation and technology transfer, which are key to achieving defence technology sovereignty.
Bakri also cautioned against overlooking policies like the DWP and the Defence Industry Policy (DIP), which could harm the country’s long-term security and resilience.
He argued that procurement decisions should be guided by these frameworks to deliver real benefits, not just symbolic gestures.
Defence and geostrategic expert Muhammad Fuad Mat Noor offered a counterpoint, suggesting that leasing was a practical option given Malaysia's financial limitations and the local defence industry’s limited capacity to maintain purchased assets.
He also pointed to past procurement failures, such as the Littoral Combat Ship (LCS) project, which suffered from delays and mismanagement, resulting in significant losses.
Fuad stressed the need for a clear and comprehensive DIP to guide future defence acquisitions and industry growth.
Malaysia’s defence procurement history is full of examples of inefficiency and waste.
The LCS project, intended to strengthen the Royal Malaysian Navy, became a cautionary tale of poor management, with unused spare parts left to rust in storage due to a disconnect between operational needs and procurement strategies.
Experts argue that these issues stem from the lack of clear policy direction and effective governance in defence procurement.
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