THE RM11.22 billion Littoral Combat Ship (LCS) project continues to face delays, with overall progress lagging by 7.55 per cent as of June 25, reigniting questions regarding the procurement process.
Bagan MP Lim Guan Eng stated that this latest development also brings to mind the controversy surrounding the LCS procurement during Datuk Seri Ahmad Zahid Hamidi’s tenure as Defence Minister, including the handwritten note "Please implement" (Sila dilaksanakan) on a letter concerning the project.
“Ahmad Zahid remains haunted by the scandal involving the purchase of five LCS vessels for RM11.22 billion since 2011, a deal under which the government has paid RM6.1 billion without a single LCS vessel being delivered to date,” he said in a statement today.
Lim also referred to a July 8, 2010 letter from Boustead Naval Shipyard (BNS) to Ahmad Zahid, then defence minister, seeking a letter of intent from the government for the LCS project.
A handwritten note attributed to Ahmad Zahid on the letter read: “SUB [Division Secretary] Procurement, please implement.”
He noted that the letter contained a request for the government's mandate and endorsement for the LCS project.
In the latest development, the Auditor-General’s Report (LKAN) 2/2026 found that the LCS project was lagging by 7.55 per cent, with delays ranging from 30 to 108 days.
The delay risks affecting the Physical Handover (PHO) of LCS 1, which is currently targeted for this coming December 26.
Of greater concern, the National Audit Department has indicated that if the PHO proceeds, LCS 1 will be handed over without achieving full operational capability, as training and weapons systems have yet to be finalised.
Full operational readiness for the programme depends on a supplementary contract that is expected to be completed in December 2035, beyond the April 25, 2030 expiry of the main contract.
Furthermore, the audit report found that the delay affecting LCS 1 would impact the delivery timelines for LCS 2 through LCS 5, while cumulative payments under the main contract have already reached RM8.557 billion—or 76.22 per cent of the RM11.227 billion contract value.
Lim also noted that this timeline raises questions about whether the technology used in the vessels will be obsolete and outdated by the time the project achieves full operational readiness.
“Beyond the loss of billions of ringgit, a 24-year delay in LCS delivery—stretching to 2035 for an order placed in 2011—inevitably raises the question of whether the technology within the LCS will be obsolete and outdated in the high-tech realm of weaponry,” he said. – October 6, 2026
