Aerospace industry set to gain finance, tax incentives

PUTRAJAYA: The government has agreed in principle to provide finance and tax incentives for businesses in the aerospace industry.

According to Prime Minister Datuk Seri Najib Razak, the industry has been growing at a rate of 11% a year for the past five years while total investments had soared 300% in the past three years.

“The Ministry of Finance has approved a package of finance and tax incentives for the aerospace industry,” said Najib, who is also finance minister, after opening the Sixth Malaysian Aerospace Council Meeting today.

Najib also chaired a meeting for the Malaysian Industry-Government Group for High TECHNOLOGY [] (MIGHT) and launched the 2009 Malaysia High Technology Industry Report.

“A detailed announcement will be made soon,” he added.

According to Najib, the incentives will be made available for businesses involved in aerospace R&D, manufacturing and production, maintenance, repair and refurbishment, general aviation, systems integration, and training .

The prime minister said the industry’s turnover last year had reached RM25 billion and provided employment for 54,000 workers. Total new investments and re-investments in the industry next year are expected to reach RM1.4 billion, and the creation of another 2,700 jobs.

The sector is expected to face a shortage of licensed aircraft maintenance engineers. “The industry needs another 16,000 engineers by 2015,” said Najib.

Meanwhile, Najib promised that there would be no cover-ups in the case of the RM50 million jet engine stolen from the Royal Malaysian Air Force.

He said that the RMAF and the Ministry of Defence (Mindef) had already lodged police reports on the matter after the engine was discovered missing late last year.

“To the credit of RMAF and Mindef, there was no intention of covering up [the theft] at all. I was the minister in charge at the time and I decided it should be reported to the police. Mindef's position is that we have to address this and take the
necessary action, even criminal action, against those involved,” he told reporters.

It was reported last week that a General Electric J85-21A afterburning turbojet engine, which served as a power plant for the F-5E Tiger 11 or RF-5E Tigereye aircraft went missing during a routine maintenance check at the Sg Besi RMAF base.

The prime minister, however, skirted a question on reports that an RMAF brigadier-general who was sacked because of the lost engine but was still receiving his pension.

The New Straits Times today reported that the general, a department head and 40 others were sacked late last year over their alleged involvement in the case.

Those sacked lost their pensions and other benefits as former servicemen while others had to opt for early retirement. The general, however, retained his pension and other benefits.