French defence electronics group Thales is expected to supply the avionics worth some RM500 million for the 18 Russian Sukhoi fighter jets Malaysia will acquire, a senior industry official said today.

"The Malaysian defence ministry has been discussing with Thales in the past few months and a decision will be made soon," the official told AFP on condition of anonymity.

The official, familiar with the talks, said the payment for the contract would include an offset programme but declined to elaborate.

"The negotiations are in the final stages and Thales may win the contract," he said.

The avionics deal covers the radar, navigational instruments and other related electronic systems in the cockpit area.

Industrial enhancement

Malaysia has signed a RM3.42 billion deal with Russia for the supply the 18 fighter aircraft.

The Su-30MK combat aircratf, expected to be delivered from mid-2006, will be modified with "suitable weaponary" to meet Malaysia's requirements and has been renamed the Su-30MKM, with the M standing for Malaysia.

Earlier, Defence Minister Najib Razak said Malaysia would impose countertrade and offset obligations for all major purchases.

"This is intended to contribute to (Malaysia's) industrial enhancement," he told some 100 delegates from the US, France and Russia who are attending a two-day conference on countertrade and offset arrangements. - AFP