Malaysian Government to Operate 28 Helicopters Through RM16 Billion, 15-Year Lease Contract

(DEFENCE SECURITY ASIA) – Malaysian Defence Minister Datuk Seri Mohamed Khaled Nordin announced that the Malaysian Armed Forces (ATM) and other national security agencies will operate 28 helicopters through a leasing arrangement.

Speaking during the winding-up session of the 2025 Supply Bill debate in the Dewan Rakyat on Thursday, he disclosed that the lease contract, valued at RM16.5 billion, spans a 15-year period.

However, he did not specify the helicopter models or the companies involved in the contract.

“This lease-based acquisition is a first, implemented by the Public-Private Partnership Unit (UKAS) under the Prime Minister’s Department. The RM16.546 billion contract covers a 15-year lease,” he said.

“It involves 28 helicopters, benefiting not only the Malaysian Armed Forces but also other national security agencies,” he added.

Under this lease agreement, the Royal Malaysian Navy (RMN) will receive two helicopters, while the Royal Malaysian Air Force (RMAF) will be the largest beneficiary with 12 helicopters.

Meanwhile, the Royal Malaysian Police will receive seven helicopters, the Malaysian Maritime Enforcement Agency (APMM) four, the Fire and Rescue Department two, and the Prime Minister’s Department one.

According to the Malaysian Defence Minister, the primary objective of leasing these 28 helicopters is to meet the operational needs of the user agencies, support daily air operations, and conduct specific missions.

Regarding the RM16 billion cost of leasing the helicopters over 15 years, he described it as “very reasonable,” adding, “The government considers the cost justifiable as it includes helicopter supply, insurance coverage, Maintenance, Repair, and Overhaul (MRO) services, including spare parts and stock, as well as courses, training, and off-base maintenance.”

Through this leasing approach, he stated, the main issue to be addressed is the availability and readiness of the existing fleet.

The company must ensure a minimum availability rate of 85 percent, with the security agencies guaranteed flight hours according to their respective needs.

“With this lease concept, end-users such as ATM and its services no longer need to secure MRO contracts or purchase spare parts,” he explained.

“Everything is handled by the leasing company, and this is a lease-to-own arrangement, meaning that after 15 years, the government has the option to purchase all 28 helicopters for a nominal RM1.”

The Malaysian Defence Minister added that after 15 years, each helicopter’s value is estimated to range between RM30 million and RM50 million, but the government will be offered the option to buy them for just RM1.

Last month, the Royal Malaysian Air Force chief, Tan Sri Mohd Asghar Khan Goriman Khan, informed local media that the service would receive Leonardo AW149 helicopters on a lease-purchase basis, with no maintenance responsibilities.

The AW149s, set to replace the Nuri or Sikorsky S-61 for RMAF, are military variants that meet ATM specifications and are distinct from the civilian-use models of the same type.

He added that these helicopters are well-suited for key missions, including Search and Rescue (SAR), Combat Search and Rescue (CSAR), and utility roles.

 

“We’ve carefully considered this, and from RMAF’s perspective, there are no issues,” he affirmed.

Earlier, Armed Forces Chief General Tan Sri Mohammad Ab Rahman mentioned that RMAF’s plan to replace the Nuri involves acquiring 24 helicopters in phased procurements through leasing.

“Phase 1 involves 12 Combat Search and Rescue (CSAR) utility-capable helicopters, with Phase 2 covering an additional 12 units,” he stated during a press conference after the 91st ATM Day Parade at Segenting Camp, Port Dickson last month. — DSA