KUALA LUMPUR, Nov 28 — Prime Minister Datuk Seri Anwar Ibrahim told Parliament today that the RM16 billion contract to lease over two dozen Leonardo helicopters for 15 years is backed by a tacit guarantee from the Italian government.

He dismissed claims the negotiations lacked transparency, that the contract was awarded based on submitted proposals and was the result of a government-to-government negotiation.

He added that Italian Prime Minister Giorgia Meloni, during the G20 conference in Brazil, assured that Leonardo would provide the best service.

The Italian government holds a 30 per cent stake in Leonardo SpA, an aerospace, defence, and security company regarded as one of the best in the world.

"We wanted the negotiations for the helicopters to be transparent and directly between governments, without the involvement of agents. We also felt it would be more efficient to streamline the negotiations to avoid multiple discussions among different agencies,” Anwar said.

"We decided to consolidate the agencies that needed the helicopters and negotiate as a group to control costs. In fact, during the G20 in Rio de Janeiro, the Italian PM assured me that the Italian government would provide full cooperation.”

Defence Minister Datuk Seri Mohamed Khaled Nordin announced the award of the leasing contract on November 20. He said the contract is a lease-to-own arrangement, with the option to purchase all 28 helicopters for a nominal RM1.

Under the framework agreement, Leonardo will supply 12 aircraft for the Royal Malaysian Air Force, four for the Maritime Enforcement Agency, and two for the Navy.

The Royal Malaysian Police and the Fire & Rescue Department will receive seven and two units, respectively. The remaining helicopter is designated for the Prime Minister’s Department.

Anwar said the lease contract will include a clause for training maintenance and repair training, as well as parts manufacturing under an agreement for knowledge and technology transfer.

This is the second large leasing contract under the Anwar government, which is ramping up its cost-efficiency drive.

In August, the Ministry of Transport announced that Keretapi Tanah Melayu Bhd (KTMB) would acquire 62 passenger train sets through a rolling stock leasing agreement between China and Malaysia valued at some RM10 billion.

"From a policy perspective we agree the leasing approach is better because we don’t want (these assets) to be a financial burden for the country,” the prime minister said.

"There are instances in which even if we buy something cheaper, the maintenance cost would far surpass the cost of purchase. That’s why we reviewed the matter, then we found that leasing and MRO contracts (is better) because we also ask them to conduct the training and parts development (partially) here.”