EUROCOPTER PURCHASE PUT ON HOLD - PM

KUALA LUMPUR, Oct 29 (Bernama) -- The government has put on hold the
purchase of Eurocopter's EC 725 Cougar helicopters until the global economic
situation stabilises, Prime Minister Abdullah Ahmad Badawi said Tuesday.

Abdullah, who is the defence minister, said the decision was made at a
meeting of the National Economic Council which he chaired on Oct 13.

"At the moment, the decision is that the purchase of the Eurocopters has
been put on hold as we need allocations to fund other projects.

"In the meantime, this is the measure we have taken to face the economic
situation. We have therefore put (the purchase) on hold," he told reporters
after attending a Hari Raya (festival to mark the end of fasting month, Ramadan)
open house at the Defence Ministry.

Abdullah said that the government had to focus its attention on more
important projects which would benefit the people.

"This does not mean that we will not buy the aircraft; when the financial
situation warrants it, we will buy," he said.

Abdullah said the government would buy the helicopters much earlier than
the
timeframe of 2011 if the economy recovered.

He also said that the acquisition process would take about three years.


"The decision has been made (to acquire the helicopters) by 2011. If we
have
the money we want to purchase them much earlier, maybe in 2009, and in three
years we will get the helicopters.

"It's not like buying a car... you purchase today, you get it tomorrow," he
said.

The cabinet, at a meeting on July 18, 2007, decided to acquire new
helicopters to replace the ageing Nuri following complaints among legislators
and the people that the helicopters had been involved in numerous fatal
accidents.

On Sept 3 this year, the Defence Ministry received an approval from the
Finance Ministry to pick a tender submission from Eurocopter Malaysia Sdn Bhd, a
subsidiary of the European Aeronautic Defence and Space Company (EADS).

The Defence Ministry had also issued a letter of intent to Eurocopter on
Sept 15.

Abdullah also said that the allocation for the EC 725s was RM1.679 billion
and not RM2.3 billion as previously reported. (US$1=RM3.5)

He said the price was a bit high due to their specifications.

"They have high specifications... they can function as combat helicopters
as
well as for search and rescue and troop lift. They can also be relied upon when
executing specific missions. They are not ordinary helicopters," he said.

When asked whether the government had notified the EADS on the deferment,
Abdullah said the company had not been informed yet.

He said that the Malaysian air force currently had 28 Nuri helicopters
which
needed constant maintenance, and that the government was aware that the time had
come for the ageing aircraft, which had been in used since the past 39 years, to
be replaced.

Asked whether the Public Accounts Committee (PAC) meeting -- to scrutinise
the Eurocopter deal -- should proceed now that the government had decided to
defer the purchase, Abdullah said the meeting Wednesday should go on as
scheduled.

"It has been decided by Deputy Prime Minister Najib Razak that the PAC be
given the opportunity to look into the deal.

"Let them see for themselves the procedures used by the ministry, why the
price is high and the reasons for the purchase (of the Eurocopters)," he said.

To a question whether the deferment would affect future purchase of the
helicopters, Abdullah said, "I don't think so."
-- BERNAMA