KUALA LUMPUR – In another shocking discovery in the littoral combat ships (LCS) controversy, the main contractor Boustead Naval Shipyard Sdn Bhd (BNS) had hired some inexperienced junior engineers to design the RM9 billion vessels, contributing to delays in their completion.
The delays were also aggravated by a shortage in skilled labour, especially when subcontractors refused to risk sending their experienced welders and quality control personnel due to late payments.
These were some of the labour issues revealed in today’s declassified Investigating Committee on Procurement, Governance and Finance (JKSTUPKK) report on LCS, which highlighted weaknesses in the project’s management.
The 106-page report laid bare how the project faced manpower scarcity and commercial issues, which affected the delivery schedules.
It added that detailed designs and production drawings for the first LCS were delayed until September 2019, when it was supposed to be finalised in December 2016.
The same issue was encountered during the building of the second LCS, which also faced installation setbacks due to labour shortage and contractual issues with a Dutch company.
The other ships also had similar issues, with the final ship seeing a delay in awarding an intent letter for steel kits to a contractor.
The steel kits for all six ships, which were supposed to be delivered by a Dutch company in stages from December 2015 to August 2017, were delayed due to a contract issue between BNS and an original equipment manufacturer (OEM).
The Dutch company was not identified in the declassified report.
Besides that, the report said seven OEMs had opted to stop work on the LCS due to BNS’ commercial problems while there were cooperation problems between BNS and French-based Naval Group (formerly DCNS) on design matters.
The detailed design phase, which involved importing basic designs to production drawings for the building of vessel gear, had been suspended.
The committee also deemed BNS as being unable to settle its debts valued at RM733 million as of May 31, 2019.
Earlier, it was reported that the committee found BNS to have poor financial capability, and is expected to face serious issues in servicing loans amounting to nearly RM1 billion.
Putrajaya could also be forking out an eye-watering RM11.145 billion in total for the six LCS, which is a substantial increase from the RM9 billion agreed upon years ago as BNS has claimed that it will need additional funds to complete all the vessels.
The LCS project has been embroiled in controversy lately due to how the government has paid RM6.08 billion to BNS for the plan but has yet to receive a single ship, allegedly due to financial instability and financial mismanagement.
Previously, the Public Accounts Committee had released a report on August 4 highlighting various discrepancies and apparent misconduct in the project over the years while recommending the Malaysian Anti-Corruption Commision take prosecutive action against those involved in the scandal. – The Vibes, August 17, 2022
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