[UPDATED] LCS subcontractors overcharged govt by three times, claims Rafizi

KUALA LUMPUR – Two packages worth RM1.185 billion was awarded to subcontractor Contraves Advanced Devices Sdn Bhd (CAD) by littoral combat ship (LCS) provider Boustead Naval Shipyard Sdn Bhd (BNS), alleged PKR deputy president Rafizi Ramli.

In a statement today, he claimed that on the same day BNS appointed CAD as a subcontractor for the LCS project (April 9, 2012), BNS also allowed CAD to appoint its associate company Contraves Electrodynamics Sdn Bhd (CED) as its subcontractor.

He said CED then issued a Letter of Award to French naval vessel maker Naval Group (formerly DCNS) to “provide work” under the two packages valued at RM1.185 billion, which would be paid by the Malaysian government.

“Unfortunately, investigations showed that these two packages, which were finalised at RM1.185 billion with the Malaysian government, awarded to DCNS were only valued at RM397 million.

“This means that the works invoiced by DCNS to CED amounts to RM397 million while the claims from subcontractors CED and CAD to the government through BNS are three times more expensive.”

He alleged that “even children could conclude” that there are “invisible hands” behind companies BNS, CAD and CED which had arranged supply contracts to take a 200% commission from the cost charged by Naval Group.

He also questioned why the government had not directly appointed Naval Group as the main vessel supplier, but instead appointed BNS, a subsidiary of Boustead Holdings Bhd, which has the Armed Forces Fund Board under the Royal Malaysian Navy as its biggest shareholder.

“Although the decision was explained as an initiative to aid army veterans, appointing two levels of subcontractors before arriving at the final supplier (Naval Group) implies that there is misconduct from the beginning.”

Taking aim at Datuk Seri Najib Razak, Rafizi labelled the former prime minister’s attempts at dodging responsibility for the project’s delay as “weak” and insensitive to the people’s demands.

“The people want to know who are the sharks robbing the nation’s money and weakening our national defence system. This is why Najib’s efforts to divert attention from the issue is, so far, very weak.

“He is giving the impression that everything was due to bureaucratic weakness… he is trying to deceive his followers to believe that this scandal does not involve elements of corruption.”

Yesterday, the former Pandan MP had claimed that the Naval Group was privy to negotiations on the government’s move to develop and procure the six LCS even before the Defence Ministry appointed BNS as the main contractor.

He said an internal investigation by BNS parent company, Boustead Heavy Industries Corporation, concluded that it was “unusual” for DCNS to issue a quotation on December 23, 2010, even before the Letter of Award was signed between BNS and the Defence Ministry.

He had also pointed his finger at former defence minister Datuk Seri Ahmad Zahid Hamidi, who helmed the ministry during the deals, and who was allegedly responsible for switching the designs to Gowind-class vessels without consulting the Royal Malaysian Navy. – The Vibes, August 9, 2022