Report: Mahathir’s ‘recalcitrant’ not cause of Aussie-Malaysia naval deal failure in 1997

Report: Mahathir’s ‘recalcitrant’ not cause of Aussie-Malaysia naval deal failure in 1997

January 3, 2018 0 By User

Picture Credit: Transfield = picture showing 2002. Guided missile launch system. Upgrade by ADI on the FFG-7 class (only a reference not related to the story)

As history unravels, and documents are extracted from archives, there is more evidence today that ex-Australian PM Paul Keating of Labor government ‘recalcitrant’ attack on former Malaysian PM Mahathir Mohamad’s did not cause the failure of a proposed Malaysia-Australia defence deal in the 1990’s.

The government said Defence Connect has now given the go-ahead for construction of new offshore patrol vessels (OPVs) under the SEA 1180 program.

But it said Australia could have had such vessels almost two decades ago under a proposed joint acquisition deal with Malaysia.

The Defence Connect portal said Australian cabinet documents of that time note the deal really came down to a favourable reception from then Malaysian prime minister Dr Mahathir Mohamad, described as idiosyncratic but also pragmatic.

“The idiosyncratic reference clearly relates to the confected row of late 1993 when Mahathir objected to Keating’s description of him as “recalcitrant”. That took diplomatic relations to near breaking point before Malaysia backed down.

“In comments on the proposal, Foreign Affairs said the recalcitrant row probably hadn’t hurt Transfield’s chances. However, Finance cautioned that the Navy could end up with a vessel that exceeded its requirements and cost much more than expected.

“Still, the government proceeded with the proposed deal, right up to October 1997 when Malaysia abruptly announced the winner was German shipbuilder Blohm and Voss with their 1,850-tonne Kedah Class, based on the Meko 100 design,” said the magazine.

Cabinet documents for 1994 and 1995, released by the National Archives of Australia at the start of 2018, show the Paul Keating Labor government was willing to give “modest support” to the proposed joint acquisition deal with Malaysia for strategic foreign policy and commercial reasons.

The Royal Malaysian Navy needed to start replacing elderly patrol craft starting in 1997-98 and had been in contact with a number of shipbuilders, including Transfield Shipbuilding.

Malaysian defence minister Najib Razak (now Malaysia’s Prime Minister), accompanied by Australian defence minister Robert Ray, visited Transfield in April 1992 to discuss a possible collaborative build program.


For Australia, there was one significant consequence of all this. For the new OPV, plus the Anzac frigates, Defence concluded it would need an intermediate-size helicopter and settled on the Kaman Seasprite, said the magazine.

After extensive technical problems, delays and cost overruns, the Seasprite project was cancelled in March 2008 at a cost in excess of $1 billion.