The Malaysian Insight

THE procurement six littoral combat ships (LCS) needs to be continued by the government, said Navy chief Mohd Reza Mohd Sany.

Reza, speaking at the Asian Defence Services Exhibition and Conference (DSA) 2022 and the Asian Security Services Exhibition (Natsec) 2022 said that the Royal Malaysian Navy (RMN) had been waiting for the vessels for a long time.

“As we know, the Boustead Naval Shipyard company is facing some issues.

“We hope the government will decide before the end of this month whether to continue this project or not. But the RMN is of the view that the project should be continued as we have been waiting (for the ships) for a long time,” he said.

Last month, the Malaysian Anti-Corruption Commission (MACC) arrested two Boustead Naval Shipyard (BNS) top officials involved in the procurement six LCS.

According to an MACC spokesperson, the two individuals were arrested on suspicion of committing malpractice and accepting bribes through payments made to three companies abroad.

The arrest follows a report made to the MACC by the president of the Royal Malaysian Navy Veterans Association Mohamad Imran Abd Hamid, on November 21 last year, regarding the construction project of six LCS that failed to be submitted on time.

Boustead Heavy Industries Corporation Bhd (BHIC), the parent company of BNS, has also lodged a report to the anti-graft agency to investigate the matter.

It is understood that with the arrest, the MACC found new clues to continue investigating the procurement contract of the ships executed by BNS.

BHIC has reiterated that it will provide full cooperation to the MACC in finding a solution to the project’s irregularities.

The LCS project, worth RM9.128 billion, was awarded to BNS by the government through the Ministry of Defence in 2011 and a total of RM6 billion has been paid for the construction of the six ships simultaneously.

However, to date, none of the LCS have been completed and handed over to the RMN, although the contract agreement in January 2014 stipulated that LCS 1, the first of two ships, should be handed over to the government by April 2019.

The project was halted during the Pakatan Harapan administration and an investigation was conducted to identify the cause of the project’s delay following the Auditor-General’s Report 2019 Series 1 published in 2019.

The Public Accounts Committee (PAC) has also conducted eight hearings involving the LCS project until January 2022. – March 28, 2022.