KUALA LUMPUR – The government will not allocate more funds if the first of the six littoral combat ships (LCS) is not delivered according to schedule, said Defence Minister Datuk Seri Hishammuddin Hussein.
He was quoted as saying by Bernama that the current focus is to ensure that the first ship is completed.
“So I want to see what has been planned, what has been presented to the cabinet, what I have answered in Dewan Negara, and the test will be the first ship. This first ship will not receive the latest funding.
“First, prove to me that we can prepare the first ship. If even the first ship cannot be completed as planned, there is no point thinking about additional funding,” he said after an event at Wisma Pertahanan here today.
He also rejected claims that there has been no progress on the LCS’ construction, as the ships are in various stages of completion.
As for calls for a royal commission of inquiry (RCI), Hishammuddin said the matter is being discussed in the cabinet and will be presented to Yang di-Pertuan Agong Al-Sultan Abdullah Ri’ayatuddin Al-Mustafa Billah Shah.
Yesterday, Hishammuddin told the Dewan Negara that he would bring to cabinet a proposal for an RCI into the LCS procurement.
This comes a week after he said that ministry officials have nothing to hide on the ships’ procurement and that he would provide full cooperation to authorities investigating the matter, including the Malaysian Anti-Corruption Commission.
The minister then reiterated that the ministry would ensure the implementation of the mobilisation phase to enable Boustead Naval Shipyard Sdn Bhd to start negotiations with the original equipment manufacturers in Europe and local companies from June 20 to December 21.
Based on the Investigating Committee on Procurement, Governance and Finance report that was declassified today, Putrajaya could very well fork out an eye-watering RM11.145 billion in total for the six ships, a substantial increase from the RM9 billion agreed upon years ago.
The report said BNS claimed in a letter on July 16, 2019 that it would need an additional RM1.416 billion to complete all six ships. The government, through the Defence Ministry, had originally settled on an RM9 billion contract with BNS after several rounds of negotiations.
According to the report, the additional figure is an estimate of direct and indirect costs of RM58 million and RM1.358 billion respectively, following changes in equipment and implementation schedule.
Another RM600 million is charged to the procurement of an integrated logistic support system through direct negotiation, which was approved by the Finance Ministry on November 1, 2018.
This comes amid an uproar over how Putrajaya already paid RM6.08 billion to BNS. – The Vibes, August 17, 2022
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