KUALA LUMPUR – Public Accounts Committee (PAC) chairman Wong Kah Woh has expressed his hope that the recently published PAC report on the littoral combat ships (LCS) issue will serve as a valuable lesson to the nation, especially on being on the guard during government procurements.
Labelling the LCS controversy as “heartbreaking”, he said that the PAC report should serve as a definitive textbook on what should be avoided during defence procurements, including power and process abuse.
“The absorbing horror story in the whole process of the LCS project shall serve as a lesson to all those who are in power, now and (in the) future,” he said in a Facebook post today.
“How could a company with a RM9 billion contract from the government come to this stage? It is more than mismanagement… Something is gravely wrong with those in power and those who got the contract.”
The Ipoh Timur MP also recollected the PAC’s site visit to the Boustead Naval Shipyard Sdn Bhd (BNS) dockyard in Lumut on December 11 last year which was also attended by witnesses from the Defence Ministry, the Royal Malaysian Navy, and BNS.
Wong said that the committee had decided to visit the dockyard after earlier proceedings on the LCS issue had been conducted, adding that much of the technology for the vessels had been purchased several years ago.
“We (PAC) checked and a lot (of the technology) were bought way back in 2013, 2014 and 2015. A question in mind is whether the same (equipment) will still be smart enough for the current needs, (especially) with the day-to-day technological advancement,” he said.
He noted that the committee was informed by BNS that the total value of the equipment in storage is around RM1.7 billion while 15% of the products have “become obsolete”, costing a loss of approximately RM263 million.
“Have all the equipment loans been paid by BNS? No, not all has been paid. That is why we can read there are huge debts owed to the original equipment manufacturer, eventually causing the halt of work and supply.
“The bus drove us past the whole construction site for LCS 1 to LCS 5. There are no longer workers at the construction site… no longer any ongoing work. Totally zero, totally stalled,” Wong lamented.
He recalled that during earlier proceedings between the committee and witnesses, it was mentioned that BNS’s financial position is in “dire states” due to company’s financial mismanagement.
He noted that when questioned by PAC member and Kluang MP Wong Shu Qi on whether the RM6 billion had been spent by BNS, Boustead Heavy Industries Corporation Bhd (BHIC) CEO Sharifuddin Md Zaini Al-Manaf admitted that the money has been spent, saying “The company has no money and we might even fold tomorrow.”
Quoting the PAC’s hansard on the proceedings, Wong said that staff salaries had been cut since October 2020 while their Employees Provident Funds (EPF) had not been paid since May 2021.
“Sharifuddin also informed the PAC that if BNS is gone, Boustead Holdings Berhad and the Armed Forces Fund Board (LTAT) will be severely affected. It will go as far as LTAT losing up to 46% of the fund size,” he said. – The Vibes, August 12, 2022
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