Procurement: Profitable Failures


October 10, 2017: In Thailand the military government is being asked embarrassing questions about an aerial surveillance system they purchased in 2009. This system never worked properly and was still around, despite failing to perform as it was supposed to in 2010. The army responded by having the surveillance system used in the 2009 system transferred to the air force for use in manned aircraft and for the truck and other equipment used by the failed system to be auctioned off. The military would have preferred to simply ignore this problem but the military government is making a big deal about government reform and reducing corruption and is forced to respond in situations like this.

This all began back in 2009 when the Thai government authorized the army to purchase an aerial reconnaissance system to deal with the growing Islamic terrorist violence in the south. The problems began when a vendor who went bankrupt before all of the equipment for the aerial surveillance system could be delivered. At that point the military said it would try to find out who screwed up, and whether corruption was involved. One interesting revelation was that the company providing the blimp system the army purchased also made cheaper aerostat systems, which the army ignored in favor of a more expensive system that proved unusable because of the vendor bankruptcy.

Back in 2009 when the Thai army decided to buy an aerostat system for use in the south it was first believed the obvious choice would be one of the aerostat systems the U.S. had been using with such success in Iraq and Afghanistan. This type of system consisted of a truck carrying the gear which can inflate the aerostat within an hour, and get it up to an altitude of 320 meters (1,000 feet) which means its cameras can see out to about sixty kilometers. The aerostat can carry day or night cameras (including a thermal sensor). In rural areas, the aerostat enables security forces to quickly get persistent aerial surveillance over a large area (2800 square kilometers.) A camera with a powerful zoom lens enables the operator to get a close look at anything down there.

But instead the Thai military bought a more expensive manned blimp type system; the Aeros 40D. The army was paying $10.5 million for each of two systems, more than twice what unmanned aerostat systems cost. The blimp itself cost $7.8 million, while the cameras cost two million dollars, and the ground communications systems $600,000. A third company, Aria International, acted as a middleman, and bought a large hanger, the Aeros 40D blimp, but was unable to pay for the cameras. The Aeros 40D arrived and after three months and Thai army personnel were trained to operate it. But the Aeros 40D never worked as advertised and was often grounded for repairs that were expensive because it usually involved replacing the expensive helium gas that was lost due to leaks. In 2017 the warranty on the blimp expired meaning future problems with helium leaks would cost even more to deal with and it was too expensive to replace the blimp in a system that never actually worked as the army said it would. When news of this leaked out the military quickly acted to dispose of the system and hoped no one would make an issue of it. That did not work and now it was widely known that even expensive gear that does not work is kept around and paid for because someone (still unidentified) is getting a percentage.

This was not the first time the military has had to deal with situations like this. Back in 2009 the army purchased of 96 wheeled armored vehicles from Ukraine. This was held up because a German firm was prevented from shipping the needed engines, because the German government wanted to show its displeasure with a 2006 military coup in Thailand (there have since been elections in Thailand, but the Germans are still upset.) The Ukrainian vehicle manufacturer eventually obtained engines from an American supplier. Meanwhile elections were held in Thailand during 2011 and the military government ended. But the generals were not pleased with the new elected government and staged yet another coup in 2014, saying it was necessary to do so because corruption was out of control. Apparently it still is.




Help Keep Us From Drying Up

We need your help! Our subscription base has slowly been dwindling.

Each month we count on your contributions. You can support us in the following ways:

  1. Make sure you spread the word about us. Two ways to do that are to like us on Facebook and follow us on Twitter.
  2. Subscribe to our daily newsletter. We’ll send the news to your email box, and you don’t have to come to the site unless you want to read columns or see photos.
  3. You can contribute to the health of StrategyPage.
Subscribe   Contribute   Close