KUALA LUMPUR, Malaysia, April 22 (UPI) -- The Malaysian army awarded a $2.5 billion contract to Malaysian company DRB-HICOM Defense Technologies for 257 armored personnel carriers.
A letter of intent was signed with DefTech, which will develop the 8x8 wheeled APC vehicles and manufacture 12 variants, the Ministry of Defense said. Variants include a personnel carrier, anti-tank weapon carrier, command-and-control and anti-aircraft weapon vehicles.
The army will take delivery of the prototype APC for testing next year.
The Malaysian-developed APC is being built from the PARS APC produced by FMC-Nurol Defense System of Turkey in co-operation with General Purpose Vehicles, which has headquarters in New Haven, Mich.
The Pars APC was unveiled in 2005, equipped in an 8x8 chassis configuration but is also available in 4x4 to 10x10 setups. The APC is aimed at the Turkish Land Forces Command.
The Pars APC is a modular design and can be fitted with various armament fits, including external and turret mounted armament, and can accommodate one- or two-men turrets.
The DefTech announcement was made on the final day of the Defense Service Asia 2010 exhibition at the Putra World Trade Center in Kuala Lumpur.
Datuk Seri Mohd Khamil Jamil, DefTech chairman, said delivery will be over six years with the first vehicles commissioned by the army in January 2012.
DefTech will farm out some of the manufacturing to local suppliers in many of Malaysia's regions. Contracts for the work will be sought as soon as possible.
DefTech is also co-operating with Denel of South Africa to build a two-man turret for the APC while Sapura Thales is expected to become the systems integrator.
There was some surprise over the amount that the government is to pay for the APCs given the large number that it has ordered, a defense analyst told The Malay Mail newspaper. Based on the number of vehicles to be procured and the contract price, each vehicle would cost $10 million, a much higher figure than if the government decided to purchase comparable off-the-shelf 8x8 APCs.
One analyst cited a German-built Boxer Multi-Role Armoured Vehicle cost of round around $625,000 each when the German army bought 200 in 2006. The Boxer's development cost exceeded $3.1 billion.
The base price paid by the U.S. Army for its Stryker 8x8 APCs is around $1.9 million each. However, more than 2,300 Strykers were ordered, the analyst said.
Defense analyst Dzirhan Mahadzir said development costs of the British Future Rapid Effects System should be considered before making assumptions about the Malaysian APC contract.
The British FRES program cost nearly $7 billion before it was canceled in 2008. But the project, including procurement and whole-life cost, if given the go-ahead, eventually was to have cost another $12.5 billion.
The U.S. Army didn't spend a huge amount on the development of the Stryker as it was developed from the MOWAG Piranha APC, Mahadzir said.
DefTech, set up in 1996, invested nearly $22 million in a dedicated defense and security manufacturing division in Pekan in Pahang state in 2001. The 25-acre site has a covered work area of 180,000 square feet. It also has a test track with NATO standard obstacles for all armored and soft-skinned vehicles, both wheeled and tracked, of up to 60 tons.
