LCS project: Ministry acted on 4 out of 7 proposals from PAC

PARLIAMENT | The Defence Ministry has adopted four recommendations listed in the Public Accounts Committee's (PAC) report on the littoral combat ship (LCS) project.

Its minister, Mohamad Hasan told the Dewan Rakyat today that this was out of seven recommendations proposed to the ministry in continuing with the procurements under the project.

“The remaining two recommendations are periodic reports to the PAC and parliamentary select committee.

“As the members of the two committees have not been appointed yet, there were no periodic reports presented.

“Insyaallah (God-willing) when these two committees are formed, reports on the latest status (of the LCS procurement) will be presented,” he said, adding that the seventh recommendation on the project was to be carried out by the MACC.

The minister was responding to Nordin Ahmad Ismail (PN-Lumut) who had asked about the actions taken by the ministry in resolving the LCS scandal.

The multi-billion-ringgit project came under public scrutiny last year when the PAC revealed that Boustead Naval Shipyard Sdn Bhd (BNS) was building six ships based on a design that was not requested by the navy.

It was also concluded that then defence minister Ahmad Zahid Hamidi had greenlit BNS' suggestion to switch the LCS’ design despite the navy’s repeated protests.

Apart from delays, PAC also uncovered that BNS still owed more than 600 suppliers money for the LCS project.

As a result, former high-ranking officer of Boustead Naval Shipyard (BNS) Ahmad Ramli Mohd Nor was charged with three counts of criminal breach of trust involving RM21.08 million under Section 409 of the Penal Code in August 2022.

BNS is the main contractor of the LCS project and was awarded the contract in 2013.

It was supposed to have delivered five LCS by July last year, yet none has been delivered to date. The first delivery was scheduled for April 2019, but the PAC noted that the ship was only 44 percent complete.

It was reported last month that the first batch of LCS would be reduced from six to five vessels after the application to continue with the project was discussed again by the government.

Asked if this would reduce the previously approved RM9 billion ceiling price of the project, Hasan said that no reductions would be made due to additional costs and rising prices of foods.

‘Proceeding well’

However, he assured the Dewan Rakyat today, however, that he has witnessed with his own eyes that the LCS ships have been built, save for the installation of electrical equipment and weapons.

“For the first LCS, everything is already there - the engine, gearbox, the propeller. The only thing that needed to be installed are the weapons and electronics. There is only one block left (to complete),” he said.

Hasan was quoted saying the same thing on Jan 9, after his visit to the navy base in Lumut, Perak.

Following his visit, he was confident that the navy’s first LCS ship would be completed in 2024.

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