KUALA LUMPUR – The government paid RM6 billion to buy almost all the equipment needed to build six littoral combat ships (LCS) as bulk orders are cheaper, said Armed Forces Fund board CEO Datuk Ahmad Nazim Abdul Rahman.
He added that a majority of the expenditure was for basic and detailed design by French submarine maker Naval Group (formerly DCNS) and that the current work progress is at 55%.
Amid the renewed controversy, Nazim, who took over as CEO on June 15 last year, also defended the cost of the LCS, comparing how much Egypt, UAE and the United States paid for theirs.
“The initial RM9 billion contract for six ships means each is about RM1.5 billion while Egypt spent RM1.9 billion on a French-made LCS. UAE similarly paid RM1.9 billion for one LCS. The US built their own advanced LCS at RM2.4 billion each.”
He said he has been to the navy shipyard in Lumut, Perak many times and attested to the work progress of the LCS.
“If you take a boat to Pangkor, you can see parts of the hulls are already done.”
He reiterated that Boustead Holdings Bhd had to take over PSC-Naval Dockyard Sdn Bhd after the failed privatisation of navy ship construction, which saw Boustead shouldering large bank loans.
He added that the money from the LCS contract was used to pay off PSC’s debt, and it was reported in the recent Public Accounts Committee (PAC) report on the project.
However, Nazim said the LCS project was halted in 2019 due to several factors but revived in April this year based on the cheapest option.
“The cabinet committee took eight months to go through the three options presented, which included the restructuring of BNS (Boustead Naval Shipyard Sdn Bhd).
“The LCS project has opened up job opportunities for 3,000 engineers and more than RM4 billion worth of work for over 400 local vendors.”
The PSC-Naval Dockyard’s primary role was to maintain the navy fleet and the Lumut naval dockyard. But the company had a management and financial crisis in 2005, which led to a takeover by Boustead Holdings.
The company was later renamed Boustead Naval Shipyard.
Last Thursday, the PAC advised the Malaysian Anti-Corruption Commission (MACC) to take legal action against those responsible for the alleged scandal, based on the findings of its report on the LCS project.
MACC chief commissioner Tan Sri Azam Baki said last Saturday that a probe is currently in the final stages, with investigation papers being delivered to the Attorney-General’s Chambers, adding that the results of the probe will be announced soon.
According to findings, the government has spent more than RM6 billion on the procurement of six LCS vessels, which were approved in 2011 while Najib was prime minister, but a single vessel had yet to be delivered to the navy to date.
Yesterday, PKR deputy president Rafizi Ramli alleged that two of the project’s packages worth RM1.185 billion were awarded to subcontractor Contraves Advanced Devices Sdn Bhd by LCS-provider Boustead Naval Shipyard Sdn Bhd.
Rafizi said investigations showed that these two packages were later awarded to French vessel manufacturer DCNS, but were only valued at RM397 million.
As a war of words ensued, Najib denied Rafizi’s allegations that he was involved in applying three layers of contracts for the project, leading to the government being charged three times its actual costs by the subcontractors. – The Vibes, August 10, 2022
