RM700m deal for new firearms

By Adrian David, NST

KUALA LUMPUR: The Defence Ministry has sealed a RM700 million deal with the United States to purchase 130,000 new weapons for the armed forces and police.

Defence Minister Datuk Seri Dr Ahmad Zahid Hamidi said the government had in 2006 approved the 5.56mm Colt M4 carbine, which can accommodate the M203 grenade launcher, to replace the Austrian-made Steyr AUG assault rifle.

SME Ordnance Sdn Bhd (SMEO), which began local production of the Steyr in 1991, had on Nov 19, 2007 undertaken the deal with American firm Colt Defence LLC to initially acquire 14,000 carbines, which were all delivered by June 2008.

The company followed it up with a second contract with the same firm on Feb 17 this year for the supply of 116,000 carbines over a seven-year period.

"Through the deal, SMEO is set to obtain the licensing rights to manufacture additional Colt carbines locally, through a technology transfer programme once the US government gives its approval," said Zahid.

He added that Malaysia would also be given the rights to market the locally produced carbines to Thailand, Brunei, the Phlippines, Indonesia and other countries using them.

"This will enable SMEO to become a centre of excellence for the manufacture of small-bore firearms in Asia," he said after chairing a Malaysia Industry Council for Defence, Enforcement and Security (MIDES) at the Royale Chulan Hotel, here yesterday.

The MIDES meeting is held regularly towards the establishment of the high-tech Malaysia Defence and Security Technology Park in Sungkai, Perak later this year.

The park will be a one-stop centre aimed at spurring the local defence industry via counter-trade, offsets, transfer of technology, counter-purchase and work packages through partnerships with foreign entities.

Investors from South Korea, Japan, Europe and the Americas have committed an initial US$1 billion (RM3 billion) and pledged an additional US$5 billion for the park.

On another note, Zahid said MIDES had agreed to streamline the purchase and manufacture of defence equipment, including firearms and apparel, for local enforcement agencies to optimise resources for their maintenance.

"Just like the car industry, local manufacturers do not compete over the same product but diversify into different capacities of vehicles."

Zahid added that local universities, like the Malaysian National Defence University and Universiti Teknologi Mara, would be encouraged to establish defence industry courses to undertake research and development for the commercial market.

"Their input can provide value-added services for defence industries which have the potential to grow enormously and provide job opportunities to talented Malaysians.

"There is great demand for a skilled workforce here and we need not look for foreign talent if Malaysians can meet the challenges."