The DAP wants answers to questions raised by the defence ministry's handling of the RM24.3 billion contract for construction of 27 Offshore Patrol Vessels (OPVs). Only one vessel has been delivered to date and it failed sea trials.

DAP secretary-general Lim Guan Eng submitted a memorandum to Deputy Prime Minister and Defence Minister Najib Tun Razak, via his personal secretary Sheik Mohd Puzi Sheik Ali at the defence ministry this morning.

Lim also urged the ministry to evaluate the competence of the contractor, PSC-Naval Dockyard Sdn Bhd (PSC), which was awarded the contract to design, build and deliver the vessels

On March 14, business daily The Edge reported that the armed forces investment fund Lembaga Tabung Angkatan Tentera (LTAT) has taken over the management of PSC on the back of concern that the company would not be able to complete the project.

Speaking to reporters, Lim outlined three main problems in relation to the project.

"One is the high cost - RM900 million for each vessel which amounts to 20 percent of the 2005 budget. Two, there has been a delay as only one vessel has been delivered. Thirdly, the vessel has come with specification shortcomings," he said.

"These problems should be handled without sentiment and with national interest as priority. Don't allow this to turn into the biggest financial scandal in Malaysian history."

Sheik Mohd Puzi declined comment but said the memorandum would be handed to Najib.

Track-record queried

Lim also asked why it had taken three years for the government to issue its offer letter to PSC after the agreement was signed in December 1995.

"PSC is owned by Amin Shah Omar Shah - also known as an MOU King - and it now possesses the largest single government contract. However, is it truly capable of carrying out the task without any experience and track record in building these vessels?" he asked.

PSC is in a joint-venture with a German company for the OPV project. Since the LTAT takeover, Amin Shah has demoted to deputy chairperson of the project, according to The Edge report.

Navy Chief Admiral Mohd Anwar Mohd Nor had, in February, criticised shortcomings in the OPV - named Kedah - and postponed its communing.

(A ship is communed to Kapal Diraja status only after passing the specifications and seaworthiness test.)

Among defects found were integration problems with its command and control systems, electronic and technical failures and outdated training manuals for officers and crew members.

"The admiral's open criticism must be viewed seriously as it means the defence ministry has spent billions for a ineffective and non-functional ship," said Lim, reading from the memorandum.

The RM2.5 billion (advanced by the government) so far has not seen any commensurate returns."

Lim also rejected the defence ministry's previous explanation that such vessels would come with primary defects initially, and that this was a common problem.

"The OPV is a new generation patrol ship equipped with guided missiles, and should rightfully be fully operational to protect Malaysian waters which are currently susceptible to pirate attacks," Lim said.

"The project has not only wasted billions of ringgit but has exposed the country to risks and threats from enemies and neighbouring countries. A royal commission should be formed expeditiously to look into the matter."