KUALA LUMPUR – Local company Boustead Naval Shipyard Sdn Bhd (BNS), which was implicated in the contentious littoral combat ships (LCS) project, could see itself advancing in the nation’s shipping industry.
According to Defence Minister Datuk Seri Mohamad Hasan (Rembau-BN) who addressed the Dewan Rakyat today, he believes a “bright future” awaits BNS, the firm that received the ministry’s multi-billion ringgit contract to build six LCS by last year, none of which have been delivered to date.
“If they (BNS) are given the ability (to flourish), they have a bright future as a leader in the local shipyard construction sector in Malaysia, despite there already being (other shipyards) such as in Terengganu and Sabah,” he said during Minister’s Question Time in Parliament today.
He added that as the “principal design owner” for the LCS project, French shipbuilder Naval Group, formerly known as DCNS, had praised the ship designs by “local talents” in BNS.
“(Our local talent) was commended for completing the (LCS’s) drawings, up to the final design.
“If possible, (shipping) should be made one of the nation’s main industries as we are a maritime country that needs many ships, not just war vessels,” he said.
Mohamad, also known as Tok Mat, said this in response to a supplementary question by Datuk Seri Noraini Ahmad (Parit Sulong-BN) on the government’s measures to ensure that the LCS project will benefit the local defence sector.
BNS, along with several of its subsidiaries, was embroiled in controversy after the Public Accounts Committee (PAC) released a report on August 4 last year highlighting various discrepancies and apparent misconduct plaguing the project over the years.
It was subsequently reported that the Defence Ministry had opted for an “unproven, conceptual” Gowind design for the LCS lobbied for by BNS, contrary to the wishes of the Royal Malaysian Navy which preferred the Sigma design.
The declassified report by the Investigating Committee on Procurement, Governance and Finance (JKSTUPKK) also noted that a main issue with the Gowind design was that Naval Group had put a caveat for the Malaysian navy to use its Setis Combat Management System, which would cost RM270 million, according to former navy chief Tan Sri Abdul Aziz Jaafar.
Besides that, the same report detailed that BNS had hired inexperienced junior engineers to design the RM9 billion vessels, contributing to delays in their completion.
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.
Meanwhile, Mohamad also said that there will be no reduction in the ceiling cost of the LCS project, even after the government had decided to reduce the procurement for the first batch of the ships from six to five vessels.
“There will be no decrease in the ceiling cost previously approved by the government (for the LCS project). It remains the same (because of) many variation orders and an escalation of costs due to the prices of goods going up.
“However, I have seen for myself (in BNS’ warehouse) that the money has been used to buy equipment and parts for the LCS,” he said in response to a question by Nordin Ahmad Ismail (Lumut-PN), who asked if RM6.08 billion remains the total amount spent on the project.
Previously, the JKSTUPKK report had posited that Putrajaya could fork out an eye-watering RM11.145 billion in total for the six vessels, a substantial increase from the RM9 billion agreed upon years ago.
Earlier on, Muhamad said that the ministry has followed through with most of the recommendations put forth by the PAC in its report.
He noted, however, that two out of the six suggestions could not be completed as they involve sending periodic reports to the PAC and the parliamentary special select committee, which have not yet been formed with new members following the dissolution of Parliament on October 10. – The Vibes, February 20, 2023
