The following analysis has reference to the on-going ‘controversy’ regarding the Malaysian Ministry of Defence’s (MINDEF) selection of the EADS/Eurocopter-built EC-725 Cougar Mk2+ medium-lift air-mobility helicopter as the eventual replacement for the Royal Malaysian Air Force’s (RMAF) existing 26 Sikorsky S-61A-4 multi-role utility helicopters. While allegations are abounding regarding MINDEF’s competitive selection process, the following issues—especially those not yet raised by some of the bidders that have lost out to the EC-725--have to looked upon objectively. But first, a not-too-brief recap of how the requirement for the new air-mobility helicopters arose.
The Genesis
The history of the Nuri’s employment by the RMAF is a colourful but tainted one. The first batch of 16--each powered by twin General Electric T58-GE-10 turboshaft engines rated at 1,400 shp each--came into service in 1968. Not exactly the most suitable rotary-winged platform for operations in Malaysia’s hot and humid conditions, they nevertheless proved to be workhorses. However, from the very onset, the Nuri fleet encountered one calamity after another. From a peak of 44 airframes in the mid-1970s, the numbers began to dwindle as a result of crashes, and by the early 1990s only 26 airworthy airframes were left. What was once the pride of the RMAF’s rotary-winged transport force and the backbone supporting the Malaysian Army’s tactical air mobility requirements to combat the Communist insurgency in the 1970s and 1980s is today considered old and overdue for retirement. Although still employed in the transport support and VIP transport role, due mainly to the change in the RMAF’s airpower doctrine (since the mid-1990s) with regard to the responsibility for tactical air mobility requirements reverting back to the individual armed services of the Malaysian Armed Forces (MAF), it has also become the primary airborne search-and-rescue (SAR) aircraft for the RMAF. Why then has the RMAF been insisting on a dedicated combat SAR (CSAR) helicopter since the late-1990s when it is unlikely to undertake such operations in future? One must realise that CSAR helicopters simply cannot operate independently of the other supporting airborne elements because even if fitted with state-of-the-art EW suites, they would not be able to survive hostile AAA. In this respect, the RMAF would stand to benefit greatly by emulating the CSAR doctrine of the British RAF instead of the USAF. To the RAF, CSAR falls under the ambit of ‘special operations’, and is only to be undertaken when the odds are calculated to be favourable. During hostilities, downed RAF aircrew are expected to avoid capture using escape-and-evasion tactics and if capture is imminent, they are to surrender and rely on the Geneva Convention for being treated humanely as enemy prisoners of war. In peacetime, however, the RAF relies solely on SAR units located in strategic locations around the British Isles run by civil agencies, but is the overall coordinator of all SAR operations. This approach, besides being more practical, makes more economic sense for the RMAF.
RMAF’s CSAR Doctrine
Before 1993, the CSAR mission did not exist for the RMAF. The Nuris then were still employed in their traditional role of tactical troop transportation, and civil/military communications flights, including SAR. For its own SAR coverage, the RMAF depended on the national SAR mechanism which falls under the ambit of the Ministry of Transport’s Department of Civil Aviation (DCA) for coordination and control. Under this system, each agency, including non-government ones, were given the responsibility of being a search-and-rescue unit (SRU) as contributing agencies allocating airborne, maritime or ground-based resources to conduct SAR whenever an operation was activated. As the coordinating agency, the DCA decided when to call off the SAR effort. Despite the obvious lack of a proper command-and-control structure, this laissez-faire approach usually worked. The mid-1990s saw a major shift in the RMAF’s thinking in respect to SAR. This change occurred when it was decided that each individual armed services of the MAF was to assume responsibility for its own tactical air mobility requirements. At once it became apparent to the RMAF that at a stroke of a pen its Nuri squadrons (comprising the Butterworth-based No3 Sqn, Labuan-based No5 Sqn, Kuching-based No7 Sqn, and the Kuala Lumpur-based No10 Sqn) had suddenly lost their raison d’etre. The RMAF was thus faced with the prospect of having to follow the way of the Australian Defence Forces and hand over the entire medium-lift helicopter fleet to the main user, the Malaysian Army. The expected transfer of assets did not actually take place, and instead CSAR and attack helicopter operations emerged as the primary helicopter-based roles of the RMAF at around the same period, this primarily being a desperate attempt by the RMAF to retain its skills and expertise in the area of helicopter operations.
Since early 2001, two things have worked in favour of the RMAF with regard to the control of its Nuri fleet. Firstly, thus far, the Army has been unable to assume responsibility for its own medium-lift tactical air mobility as it has been struggling to even operate its SA.316B Alouette III helicopters (transferred from the RMAF to the Army Aviation Corps in April 1997), much less, the Nuris. Secondly, the Army in all probability has realised that it cannot relish the prospect of losing a big portion of its annual operational expenditure to cater for the Nuris’ flight operations, flying training, and periodic maintenance, repair and overhaul requirements. As a result, the acquisition of an integral heliborne air mobility capability has been left more or less unresolved, and now dangles like the ‘Sword of Damocles’. The question on everybody’s mind today is: does the RMAF still have custody of the role of heliborne tactical air mobility, or has this responsibility passed irreversibly to the Army? If so, what has the Army been doing about it?
In light of calls to replace the Nuris, what seemed an ordinary and unimportant decision made in the mid-1990s has now resurfaced to become a major determinant. The publicity surrounding the selection process for a replacement helicopter fleet is sure to bring to light the question of the Army’s tactical air mobility requirements/capabilities again. This time around, the RMAF is unlikely to be able to avoid the issue and will probably have to address it once and for all. It can either deal with it as part of the on-going Nuri replacement exercise, or isolate itself from it altogether and continue pursuing the CSAR agenda. If it decides on the former, however, the RMAF will suffer the risk of having the Army pursuing ownership of the helicopters acquired for replacing the Nuris, consequently splitting as it were, the capital budget allocated for acquiring medium-lift helicopters required for both air mobility and CSAR. What then is the most favourable option for the RMAF? It is obvious that for its own sake it should play down the disputed and problematic acquisition of a CSAR capability, and instead reclaim back ownership of the tactical heliborne air mobility role (that can now be enhanced to air assault for supporting the Army’s projected vertical envelopment operations) it has traditionally held thus far. For a start, it is the more substantive and desirable of two roles and it is presently the more competent armed service to undertake the job compared to the Army. Furthermore, the intended transfer of heliborne air mobility assets/capabilities is still only a paper exercise and not likely to be actualised, at least in the near-term, given the Army’s lack of support infrastructure capacity and operational interest. Uppermost in the minds of RMAF planners today should be the question of numbers.
Competitive Bidding Process
Following the Economic Planning Unit’s notification on October 10, 2007 authorising the MINDEF to issue global tenders for seeking bids to supply replacements to the ‘Nuris’, MINDEF on November 7 released the tenders, which called for the supply of 12 medium-lift air-mobility helicopters for the RMAF. As revealed by MINDEF Secretary-General Datuk Abu Bakar Abdullah on October 17, the tender offers received by February 12 this year were:
T521/07/A/001: £341.88 million (RM2.08 billion) from AgustaWestland Helicopters, which proposed the AW-101.
T521/07/A/002: RM663.189 million from an unknown party.
T521/07/A/003: €104.632 million (RM494.9 million) from Russia’s Rosoboronexport State Corp, with the Mi-17V-5 on offer through its primary agent Vertical Master Sdn Bhd.
T521/07/A/004: US$220.496 million (RM777.45 million) from Sikorsky Corp, offering its HH-92 Superhawk through its primary agent Evergreen Aviation Resources Sdn Bhd.
T521/07/A/005: US$708.305 million (RM2.49 billion) from Boeing IDS, which offered its CH-47F Chinook.
T521/07/A/006: €233.345 million (RM1.1 billion) from Eurocopter SA, which offered the EC-725 Cougar Mk2+. The company's agent in Malaysia is Sari Varia Sdn Bhd.
T521/07/A/007: US$348.17 million (RM1.22 billion) for 12 Mi-172KFs being offered by Canada’s Kelowna Flightctaft Ltd via its primary agent Mentari Services Sdn Bhd.
The tender submissions were then split up into three parts for MINDEF’s technical evaluation committee, offset evaluation committee and price evaluation committee to evaluate. However, depending on MINDEF’s methodology of determining each bid’s tender value, it appears that Sikorsky’s bid was valued at US$427.20 million (RM1.452 billion), while Eurocopter’s bid worked out to RM2.317 billion, and the Mi-172KF’s bid worked out to US$264 million, or RM898 million according to figures made public by Mentari. MINDEF has not yet explained its methodology of arriving at the actual or final bid figures, but we must assume here that MINDEF has a perfectly rational reason for arriving at the final pricing levels. The committees’ conclusions were tabled at a Tender Board meeting on July 22 and were then forwarded to the Finance Ministry on August 4. MINDEF received the green light on September 3 to proceed with contractual negotiations, and Eurocopter SA was on September 15 issued a Letter of Intent (LoI) for the supply of an initial 12 EC-725 Cougar Mk2+ helicopters. Although the RMAF has projected an eventual total long-term requirement for 74 such helicopters, MINDEF has obtained sanction from the Ministry of Finance for procuring only 27 helicopters, of which 12 worth RM1.76 billion will be acquired under the on-going 9th Malaysia Plan, with the remaining 15 being ordered under the 10th Malaysia Plan (2011-2015). Eurocopter had since 2005 been proposing its EC-725 Cougar Mk2+ for both air-mobility and CSAR operations. Up until July 2007 the twin-engined EC-725 was almost certain to bag the RMAF’s order for ten 11-tonne EC-725s configured for CSAR. After that, however, it had to compete with the HH-92 Superhawk and AW-101 from for bagging the lucrative order from MINDEF for the supply of an initial 12 multi-role utility helicopters. What probably tilted the balance in favour of the EC-725 was Eurocopter’s demonstrated capability and intention to fully localise the EC-725’s through-life product support and depot-level maintenance requirements at its sprawling MRO facility now coming up at Subang’s Sultan Abdul Aziz Shah International Airport in Selangor State.
Explaining The Anomalies
While allegations are abounding regarding MINDEF’s competitive selection process, the following issues—especially those not yet raised by some of the bidders that have lost out to the EC-725--have to looked upon objectively.
1) Of all the above-mentioned bidders, the Mi-17IV was first brought to Malaysia by Russia’s Rosoboronexport State Corp during the LIMA 2001 exhibition and was extensively flight-tested after the exhibition by the RMAF. Subsequently, a visiting RMAF delegation led by the RMAF Chief to the MAKS aerospace exhibition in Russia last year was shown a civilian variant of the Mi-17V-5 (no96369) belonging to Kazan Helicopter Plant (KHP) by Rosoboronexport. The HH-92 Superhawk’s prototype from Sikorsky was demonstrated to a visiting RMAF team in the US more than a year ago. The EC-725 too was flight-tested and evaluated over a two-week period by the RMAF when the helicopter was brought to Malaysia during the DSA 2006 exhibition in April 2006, and during the LIMA 2007 exhibition in Langkawi early last December. Therefore, for some to claim that the RMAF and the MINDEF tender evaluation board did away with the practice of flight-testing the principal contenders of the contract is fallacious and wrong.
2) The Mi-17 will begin being phased out of service over the next five years by the Russian military end-users. That is why a competition is now underway within Russia between Kamov OKB (offering the Ka-92) and Mil Design Bureau (offering the Mi-38) for supplying the next-generation medium-lift helicopter to fulfill domestic Russian requirements. If the RMAF were to select either the Mi-17V-5 or Mi-172KF, while its initial procurement costs would be much lower, their through-life product support costs would be three times more than the figures quoted for helicopters like the EC-725, AW-101 and HH-92 Superhawk. This is because the RMAF will find it cost-prohibitive to maintain the airworthiness and serviceability of the Mi-17 once Russia stops producing spares for this helicopter over the next 10 years.
3) For the RMAF tender competition, there were two offers of the Mi-17: the Mi-17V-5 from Russia’s Rosoboronexport State Corp (whose factory cost is an estimated US$9 million per unit and was being offered for the RMAF for US$11.78 million), and the Mi-172KF (whose factory cost is an estimated US$11 million per unit but is being offered at an inflated marked-up figure US$22 million) being offered by Mentari Services Sdn Bhd. Interestingly, if either of the two parties were to win the contract, then they both would be sourcing the Mi-17s from the same OEM, i.e. KHP, based in Russia’s Tatarstan republic. And when it comes to military procurements from abroad, the customer (MINDEF in this case) universally requires guaranteed through-life product support from the OEM. Consequently, if MINDEF were to select the Mi-17 then the following questions would have required convincing answers:
a) While the Russian government would have given product support guarantees through its official weapons import/export agency Rosoboronexport for the Mi-17V-5, would the same guarantees be extended for the offer for the Mi-172KF?
b) If not, then who would guarantee through-life product support for the Mi-172KF? Mentari? Or its principal—the Canada-based Kelowna Flightcraft Ltd—or the helicopter manufacturer—KHP—from whom Kelowna was offering to source the Mi-172KF airframes and then retrofit them with cockpit/mission avionics sourced from Honeywell or BAE Systems or SELEX Sensors & Airborne Systems? Who would assume product liabilities in the event of a Mi-172KF accident-related Board of Inquiry establishing that the accident/crash was due to technical error? What if Rosoboronexport State Corp prevented KHP from cooperating with the RMAF during such accident/crash investigations?
c) Did the Russian government, through Rosoboronexport, authorise either KHP or Kelowna Flightcraft Ltd to supply the fully militarised (i.e. weapons-equipped) Mi-172KF to Malaysia? This question needs to be answered in detail because as per present Russian government guidelines, only Rosoboronexport State Corp is authorised to export Russia-origin weapon systems directly to foreign military customers after inking government-to-government contracts.
d) How many Mi-172KFs have been sold to date by the joint industrial venture between KHP and Kelowna Flightcraft Ltd to military customers (not for VIP transportation, but for undertaking air-mobility operations under combat conditions) worldwide? Which regulatory/flight certification authority has issued the MILSPEC-compliant certificate of airworthiness of the Mi-172KF’s military variant? Is such a CofA acceptable to the RMAF? Which regulatory authority will issue the STCs for the Mi-172KF’s customer-specified avionics suites? Will the Mi-172KF, or for that matter the Mi-17V-5, have additional built-in performance growth features, such as the incorporation of fly-by-wire flight control systems and in-flight refuelling systems, which will most likely have to be mandatory on-board systems especially since the helicopter would be required by the RMAF to remain operationally viable for the next 40 years?
Regrettably, the ‘naysayers’ and conspiracy theorists alleging irregularities in the EC-725’s selection process have yet to give rational and convincing clarifications regarding the four above-mentioned points.
4) Today, it only makes sense for countries like China and India to continue buying Mi-17s in large numbers because only these two countries have had more than 30 years of experience operating the Mi-8Ts and Mi-17s and have therefore established the huge domestic MRO (maintenance, repair & overhaul) infrastructure required to maintain and operate such helicopters. This is not the case with Malaysia, which requires either the helicopter OEM to set up extensive, brand-new MRO infrastructure to support a new helicopter-type, or upgrade existing MRO infrastructure at tremendous cost to service the new helicopter acquisitions.
5) As a consequence of the above, only Eurocopter (an EADS subsidiary) can be said to have comprehensively complied with the RMAF’s helicopter-related MRO demands (which played a pivotal role in tilting the balance in favour of the EC-725’s competitive bid) since only Eurocopter has to date made unilateral and substantial investments in its own sprawling helicopter MRO facility in Subang (which Sikorsky, AgustaWestland and the Russians are not known to have done thus far) since 1998. Such facilities, which will undoubtedly expand their capabilities as the EC-725s are inducted progressively, will enable the RMAF to fully localise the EC-725’s serviceability requirements, and ensure high availability and levels for its initial EC-725 fleet, which will undoubtedly be subject to intensive usage in its earlier years due to the demands of both operational conversion flying training as well as operational flying. One must also bear in mind that such MRO facilities will be fully authorised and certified by the OEM (Eurocopter), and as such will not be exposed to the third-party MRO liabilities of the type that has plagued the RMAF’s dwindling S-61A-4 ‘Nuri’ helicopter fleet. No one thus far, including Rosoboronexport or Mentari or AgustaWestland or Sikorsky, has officially bothered to explain how much the through-life product support costs of the Mi-17V-5 or Mi-172KF or AW-101 or HH-92 Superhawk would be if these entities were to establish in-country dedicated MRO facilities. Only if such expenditure figures are forthcoming from them would one be able to make accurate cost comparisons with the Eurocopter/EC-725 tender bid. Until then it remains a case of simplistic comparison of apples with oranges.
6) As a result of the above, when viewed from a techno-economic matrix, it was ONLY Eurocopter that ‘almost fully’ complied with the ASQRs of the RMAF while at the same time offering guaranteed through-life product support for the EC-725. The EC-725 of the type selected for the RMAF is presently operational with the armed forces of France and Saudi Arabia and has already been combat-proven in Afghanistan. The AW-101 is a combat-proven helicopter (which was recently selected by India for VVIP transportation), but the problem here was that the RMAF would have had to allocate substantial scare financial resources for setting up dedicated MRO facilities from scratch to support the AW-101 fleet. Sikorsky’s HH-92 Superhawk is estimated to have come in with the second-best offer (to be detailed in the near future) but militarily this helicopter is still an untested product since it has yet to be ordered in bulk by any armed forces worldwide.
In conclusion, it would do well to the ‘naysayers’ to view the entire issue through the prism of objectivity prior to making ill-informed conclusions based merely on speculative accusations of some ‘sore losers’.—Prasun K. Sengupta
To provide its new-generation principal surface combatants with extended precision warfare capabilities for both ASW missions and anti-ship strike operations via over-the-horizon targetting, the Indian Navy (IN) has initiated a two-pronged approach: procuring the initial 16 of a projected 60 new-generation shipborne 10-tonne multi-role helicopters; and upgrading the mission sensor suite of 18 of its AgustaWestland-built Sea King Mk42B multi-role, medium-lift, shipborne helicopters and 28 Kamov Ka-28PL ASW helicopters. Navy HQ has already issued restricted RFPs to AgustaWestland, Sikorsky Aircraft and NH Industries (part of EADS) calling for the off-the-shelf supply of an initial 16 helicopters. Contenders for fulfilling this requirement include AgustaWestland’s AW101, NH Industries’ NH-90, and Sikorsky’s CH-148 Cyclone.
