KUALA LUMPUR – The Defence Ministry (Mindef) is in the midst of removing middlemen companies from the troubled RM9-billion littoral combat ship (LCS) project, said minister Datuk Seri Mohamad Hasan.
Speaking in the Dewan Negara today, Mohamad said the process however would take some time as the ministry was dealing with several caveats pertaining to the contract agreement with a middleman firm – Contraves Advanced Devices Sdn Bhd.
Among the caveats, he said, was that the company had asked for immunity from any possible legal action against them in the future.
He added that his ministry has refused to review the company’s request.
“By removing the middlemen, the shipyard run by Boustead Naval Shipyard can directly deal with the OEM (original equipment manufacturer) rather than the middlemen.
“We have reached an agreement to this effect. While there are still several caveats we are dealing with, there is one caveat that we will not compromise with – where middlemen (companies) had asked to be excluded from any (legal) action against them in the future.
“We do not want to compromise on that. For Mindef, the power to investigate and prosecute belongs to the respective agencies and not under the ministry’s purview.”
Mohamad said all parties have agreed to sign a universal settlement agreement and resolve the matter amicably to ensure the project would proceed smoothly.
The Rembau MP today also reiterated the government’s commitment to complete the project and deliver at least five LCS to the navy. The project’s completion is crucial to ensure the safety of Malaysian waters.
To this effect, the project still has a budget ceiling of RM3 billion, he said.
Mohamad also explained Mindef was seeking formal approval from the unity government to proceed with the project.
“This project has been approved by four previous administrations but because this is a new government, Mindef opined that it is a must to seek formal approval from the cabinet.
“We were supposed to get the approval from the cabinet but we are still ironing out the issues as suggested by the PAC (Public Accounts Committee).”
Previously, the PAC had proposed seven recommendations to Mindef in continuing procurements for the LCS project, including periodic progress reports to the committee as well as to the parliamentary select committee.
Prime Minister Datuk Seri Anwar Ibrahim had said the investigation into the LCS project would continue as the prosecution had yet to act against the main players involved.
The Investigating Committee on Governance, Procurement, and Finance 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.
The LCS project came under scrutiny last year when the PAC said none of the six ships ordered had been completed although RM6.08 billion had been paid. – The Vibes, April 6, 2023
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