The government has paid a whopping 1.341 billion euro (RM6.7 billion)* for the two Scorpene submarines, the purchase of which is currently under probe by the French courts for corruption. 

Defence Minister Zahid Hamidi revealed the expenses in a written answer to Batu MP Tian Chua’s questions in Parliament today.

It is believed that another RM600 million was to be paid for maintenance services over the next six years, bringing the grand total to RM7.3 billion.

“The maintenance contract is still under negotiation and will be finalised in the near future,” Zahid said. 

Out of the total paid, 114.96 million euro (RM574.8 million) went to Perimekar Sdn Bhd, which is owned by Prime Minister Najib Abdul Razak’s close associate Abdul Razak Baginda.

This amount, paid for “coordination and support services provided to the Royal Malaysian Navy” including training, represents 10 percent of the total price of the two submarines, worth 969.15 million euros (RM4.85 billion).

It is this portion which is currently investigated by the French authorities as it is suspected that this could be “commissions” instead of “support services”, and as such illegal under French laws.

In addition, the government also paid French naval defence company DCNS 37.5 million euros (RM177.5 million) for “support and test equipment”.

Ballooning maintenance fee

Chua (right in photo) had asked the defence minister to detail full expenditure pertaining to the two Scorpene submarines, as well as details relating to a separate purchase of submarine missiles from France and Italy.

To the second question, the minister revealed that the government has paid 219.265 million euros (RM1.1 billion) for the submarine missiles (below), which are expected to be delivered in 2013.

Commenting on the Scorpene issue to reporters at the Parliament lobby, Chua said that the government had compelled DCNS to have a joint-venture with a local company to provide the maintenance services. 

He added that after they had set up in Malaysia with local partners Boustead Holdings Berhad, the quoted maintenance fee for 2010 ballooned to RM270 million.

This constitutes nearly 50 percent of the RM600 million six-year maintenance fee quoted by DCNS prior to the joint venture. 

DCNS has a history for corruption, and was in May ordered by Paris-based International Chamber of Commerce’s International Court of Arbitration to pay the Taiwanese government close to RM3 billion as penalty over “unauthorised commission” on the sale of warships in 1991.

None Found