PAC navy vessels delivery delay probe: Zahid vows to cooperate
Former defence minister Ahmad Zahid Hamidi assured his cooperation after the Public Accounts Committee (PAC) said it would summon him with regard to the probe into irregularities in the ministry’s RM9 billion vessel procurement deal.
Inked back in 2011 without an open tender, the deal is the ministry’s (Mindef) largest ever. Zahid helmed Mindef from 2009 to 2013.
Former defence minister Ahmad Zahid Hamidi assured his cooperation after the Public Accounts Committee (PAC) said it would summon him with regard to the probe into irregularities in the ministry’s RM9 billion vessel procurement deal.
Inked back in 2011 without an open tender, the deal is the ministry’s (Mindef) largest ever. Zahid helmed Mindef from 2009 to 2013.
As of October 2020, RM6.083 billion in taxpayer’s money has been paid but none of the six second-generation Littoral Combatant Ships (LCS) have been completed or delivered.
In a statement last night, Zahid, who is also Umno president and government backbencher, said he was prepared to appear as a witness in the PAC probe.
“It must be explained that the LCS were built by a subsidiary of Boustead Holdings Bhd - Boustead Naval Shipyard (BNS) whose biggest shareholder is the Armed Forces Fund Board (LTAT) through Boustead Holdings Bhd.
“I will give my full cooperation to the PAC on whatever information (they need) on this.
“Any party which causes construction delay should be responsible in providing an explanation to the PAC,” he posted on his Facebook page.
LTAT owns 59.45 percent of Boustead Holdings.
Meanwhile, Zahid also said that he “wholeheartedly supported” the PAC’s probe into the matter.
“I hope the transparency of the investigation will be made known to the public,” he added.
Meanwhile, in another statement this morning, Zahid said he had no knowledge regarding the issues surrounding the irregularities.
He said Boustead’s failure to deliver only came in 2019, whereas his tenure as defence minister was between April 2009 and May 2013.
According to Zahid, the awarding of the contract to Boustead was also done accordingly with the government's guidelines for direct negotiations.
"The guidelines dated April 17, 2002, clearly stated that direct negotiations can only be done after approval is given by the Finance Ministry, and not the Defence Ministry.
"On the issue of the late penalty imposed on Boustead, I believe that the Defence Ministry has already given an explanation on the status of this matter. The ministry had also stated that a letter of demand has been prepared and submitted to the 'Control officer' for approval," he said.
On the other issue regarding payments that were made to Boustead, Zahid said these happened in 2019 when he was no longer the defence minister, and thus he had no knowledge nor control over whatever decisions made by the ministry regarding the payments.
Yesterday, PAC chairperson Wong Kah Woh said the committee would also be summoning Royal Malaysian Navy Admiral Abdul Aziz Jaafar and main contractor BNS when it continues with its probe in January 2021.
Seven witnesses have already been questioned, including Auditor-General Nik Azman Nik Abdul Majid, Mindef secretary-general Muez Abdul Aziz and former auditor-general Ambrin Buang.
Wong had remarked how the delivery delay pointed to weaknesses in governance, procurement and finances while subsequently compromising national security. An LCS is meant to be used as a patrol vehicle.
The PAC aims to table its report on the matter in the next March 2021 Dewan Rakyat sitting.
The previous Pakatan Harapan administration had scrutinised the RM9 billion deal, noting that incomplete design, acquisition delays and sub-par work were among the reasons for the delay.
However, the government decided to continue with the project as more than RM6 billion had already been spent.
The latest Auditor-General’s Report 2019 chastised Mindef for not fining BNS RM217.5 million for failing to deliver not even one of the six LCS.
In response, current defence minister Ismail Sabri Yaakob said the Perikatan Nasional government was considering its options, including the possibility of terminating the contract.
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