It is dubbed as a case which could give interesting insights into the inner workings of the Defence Ministry when its awards valuable contracts to private companies notwithstanding a glimpse into what went wrong with the maintenance contact for the RMAF’s F5/E fighter jets ( below ).

Tomorrow, a local company, which is suing the defence ministry’s secretary-general, its minister and the government for almost half a billion ringgit, will have its day in the High Court and has secured a former secretary-general to testify against the defendants.

Hashim Meon, who was secretary-general of the ministry until 2003, is scheduled to testify as the first witness in the suit which is expected to make headlines.

f5e fighter plane 020905 Besides Hashim, Malaysiakini understands that former top guns of the armed forces could also testify against the government. It is learnt that one of them may be former RMAF chief Abdullah Nasution.

The case involves a breach of contract filed by local company, Langkawi R&D Academy Sdn Bhd, the company awarded to maintain and upgrade the RMAF’s existing fleet of Northrop's F5/E and F5/F fighter aircraft.

The company filed the suit in 2005 after claiming that a backdoor deal between the defendants and a sub-contractor had led to its contract’s early termination and a violation of its 10-year concession inked in 2001.

It is seeking RM48 million as general damages and another RM432 million in future losses, exemplary damages, costs and other reliefs deemed fit by the court.

Grounded jet aircraft

The company said it had briefed then prime minister Dr Mahathir Mohamad and present premier Najib Abdul Razak, who was defence minister then, about the F5/E and F5/F programme which was directed at upgrading the F5/E fleet which was grounded then due to a lack of funds.

In the company's statement of claim, it stated Mahathir was a witness to the signing of the contract in question.

The company adds it was contracted to undertake avionics upgrading and refurbishment works involving the first of 10 RMAF Northrop F5/E and F5/F fighter jets that were grounded on Oct 11, 2001.

Although the contract was dated Oct 11, it took effect on June 15, 2001 and it was supposed to remain in force until June 14, 2011. The company claimed that it received its first F5/F aircraft to be upgraded sometime in July 20, 2001.

The company adds that the defendants then suddenly terminated the contract on Sept 6, 2002 without reasonable grounds.

The defendants, in reply to the suit, claimed that Langkawi R&D Academy had failed to provide a performance bond within 14 days of sealing the deal and had also failed to deliver one unit of a ‘flyable technology demonstrator’ before Nov15, 2001, as contracted.

However, in reply, the company countered that the defendants had not handed a notice of a 30- day termination period and it never raised the issue of a performance bond.

Langkawi R&D Academy says it was shocked to learn that the defendants had had ‘secret dealings’ directly with Caledonian Airbone Systems Ltd (CAS Ltd) to continue upgrading works on the F5/E aircraft without its knowledge.

Langkawi R&D Academy said it had earlier terminated its sub-contract with CAS Ltd due to its unsatisfactory performance and had intended to engage Taiwan-based Aerospace Industrial Development Corporation (AIDC) on stand-by as its replacement.

Plaintiff now a fisherman

It said it was also shocking that the ministry and government had given full support to CAS Ltd for the latter to continue the upgrading works instead of searching for an alternative local partner.

The company claimed that when they met Najib, he ‘did not give any satisfactory reason’ but had made known his stand that he supports CAS Ltd to continue the works.

Another local aircraft maintenance company Airod Sdn Bhd, had also begun to lobby for the maintenance via a top-level visit to AIDC Taiwan, claims Langkawi R&D Academy.

Airod is also alleged to have signed an MoU with CAS Ltd and two other foreign partners - Northrop Gruman Corporation and Recon Optical Incorporated - to proceed with the upgrading works.

As a result of the loss of contract, one of the co-founders of Langkawi R&D, Mohammad Abdullah, stated that he had to become a fisherman to earn a living.