Sukhoi Jets (2)

I could not believe the results of the first calculation, so I did more research.
There is no consistency in the information and perhaps this is where the MPs should ask the YB Defence Minister to give some straight answers. (I will deal with this later)

The numbers RMAF has purchased range from 18 to 40 Su-30MKM. The M in MKM stands for Malaysian version as the jet is highly customisable (guess like software).
Price paid ranges from RM3.2B to RM3.55B (according to Bernama).
I found the unit price of Su-30MKx planes - it ranges from US$33 to 45M each.

So if we do the math again,
If we bought 18 planes (and that seems to be the most consistent number appearing) at US$33M the total is US594M, or if we paid US$45M per plane we would have paid US$810M
At the FX rate of 3.5, total bill to us is RM2.079 B (for US$33M p.p) or RM2.835 B for US$45 p.p.
That leaves a balance of either RM1.121 B or a mere RM365M.
However since they (the sellers) paid the local firm RM380M the price must have been US$33M p.plane.
So they had an extra of RM1.121B.
If we deduct US$40M for our space tourist at FX of 3.5 we arrive at a balance of RMRM981M
However if we calculate the costs using the price paid at RM3.55B as reported by Bernama, we arrive at the balance of either RM1.331B or RM575M, after taking into account the commission and the space tour costs.

So what happened to tax payers money ranging from RM575M to RM1.3 B?



Questions our MPs should ask are:
a) How many Sukhoi 30-MKM did we actually buy?
b) Why Sukhoi jets? What is the benefit of Su-30MKM compared to the F-16 or F-22 or Eurojet? Was there an evaluation made? if so can they provide a copy to Parliament.
b) What did the purchase include? (How many years of spare parts and training)
Don't ask the obvious question - how much is the unit price as they will give you their version. We want to catch them out.

So once they answer these questions, we then ask the supplementary question as to where the money went. Now he is put in the spot and no longer ask about whether they paid commission.

Most likely they did not pay any commission (as too obvious), so they would have told the Russians to pay and this would have been added to the price. Now you see the way to ask good and cross examining type questions.

Sukhoi & Scorpene deals "properly made"

The STAR on Wednesday 7 May 2008 reported that "Najib said in the case of the Sukhoi jet, the Russian Government had the right to appoint the agent." The Star said that "the purchase ... was done according to proper Government procedure." The company that was involved Perimeker Sdn Bhd is a joint venture between LTAT, Boustead Holdings (a GLC) and one KS Ombak Laut Sdn Bhd, and another agent - IMT Defence Sdn Bhd - a company controlled by former CM of Malacca - Adib Adam - earned a commission of RM380 million - with regards to the Sukhoi jets.

The price quoted by the STAR for the Sukhoi jets is RM3.2 billion. A commission of RM380 million represents a staggering 11.8% commission. Now lets assume that the Government paid the Russians RM3.2 billion, from this they would have had to deduct 11.8% to pay the commission, leaving a net amount of RM2.82 billion.
The Indian Air Force purchased 40 Sukhoi jets from Russia in 2007 for US$40 million, approximately US$1M per jet. (A US$ 40 M price tag is equal to RM140M at a 3.5 exchange rate).

The RM2.82 billion could have bought us 800 Sukhoi jets. Yet according to Aljazera in Oct 2007 - Malaysia bought 40 Sukhoi jets.
Part of the RM3.2 billion deal - space tourist - which would have cost the Government - US$40 Million.

Assuming that sum was included (because there is no free lunch) the balance available for the jets comes down to RM2.68 billion. That is still about 766 jets. But we bought 40 jets.

OK now this is really interesting - if we bought 40 jets and India bought 40 jets how come we are paying US$19.1 Million per jet, compared to India who is paying US$1 million per jet?

The difference is 190% - which is impossible to account as being for spares, training, housing, etc etc (all the support services when getting a new product).

So lets assume that the jets cost RMAF US$5 million each including spares, training etc etc. That results in a total of US$200M (about RM750M). So if this is the case what happened to the balance of RM2.75 billion - where did it go, who got it?
If it was by the vendor it made a huge profit and Malaysia has just wasted tax payers money to enrich the Russian Government owned company (Federal State Unitary Enterprise 'Rosoboronexport') that sold us the jets.
Even if we were to double the price to US$10M per jet the total bill is only US$400M (RM1.3Billion), that leaves a balance of RM1.9 billion that is hard to account for.

What is needed is to follow the money in Russia as this would show us what the money was used for.

This point should be asked of the Defence Minister to answer on behalf of the RMAF who bought this (because surely it cannot be expected that the Rt. Hon. Defence Minister would have been intimately involved in commercial negotiations?)

Our MPs must ask this of him, now before the issue slides into oblivion.