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Defence and Aerospace Open Forum 22 nd April 2008. IMPLEMENTATION CHALLENGES IN DEFENSE ACQUISITION – REQUIREMENTS OF LOCAL CONTENT AND OFFSET. By: Siti Naim Jamaluddin Boustead Naval Shipyard Sdn. Bhd. RMN PATROL VESSELS PROJECT.
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Siti Naim Jamaluddin
Boustead Naval Shipyard Sdn. Bhd.
Supply and Delivery of Six (6) Patrol Vessels for the Royal Malaysian Navy;
Integrated Logistics Support; and
Performance of Commercial Package Programme
CPP consists of the following elements:
Incorporation of the local content in the design and construction of the PV of not less than Ringgit One Thousand Six Hundred and Five Million (RM1,605,000,000.00), referred to as CPP No. 1.
Offsets programme of not less than Ringgit One Thousand Six Hundred and Ninety Million One Hundred and Sixteen Thousand Ninety (RM 1,690,116,090.00), referred to as CPP No.2
Counter-purchase obligations of not less than Ringgit Six Hundred Million (RM600,000,000.00), referred to as CPP No. 3
man hours provided by Malaysian citizens employed for the design and construction of the PV by BN Shipyard or any third party;
raw materials produced, and components and equipment manufactured in Malaysia; and
imported raw materials or semi finished components.
Vendor Development Programme or VDP means the programme, which sets out the parameters for the development and promotion of vendors to participate in the:
Suppliers of raw materials produced, and components and equipment manufactured in Malaysia;
Suppliers of imported raw materials or semi-finished components in which local elements have been incorporated; and
Service providers of the activities referred to in production, manufacturing and performance related to steel components, machinery components, electrical, PCB assembly, equipment and services, accommodation outfitting, oil and gas fabrication and related services, fibre glass equipment and painting services.LOCAL CONTENT
Direct offsets are activities, which are directly related to the Patrol Vessels, which would assist in the establishment of an indigenous self-sufficient sector to provide through-life support of the Patrol Vessels.
Indirect Offsets are activities, which are not directly related to the Patrol Vessels, which would:
Develop and enhance the standards of maritime related industries in Malaysia;
Upgrade the available technology in the defence related industries in Malaysia to support the Patrol Vessels;
Ensure the transfer of technology; and
Develop and enhance any other areas of technology as may be determined by the Government of MalaysiaOFFSET
Transfer of Technology
Research and Development
Training and Skills Upgrade
Procurement of Goods and Services
Sub Contract of Works
Joint Venture Arrangements
Collaborative Ventures with Universiti Teknologi Malaysia; and
Any activities as agreed upon between the Government of Malaysia and BN ShipyardOFFSET - continuation
relatively easy to achieve and the fees have been collected in full.
Establishing common understanding on the “interpretation” between JMC and Implementor(s);
Participation of foreign entities to incorporate “local content” in their scope of obligations;
Ability and readiness of local entities.CHALLENGES