The Malaysian Insight

PUTRAJAYA was overcharged three times the actual cost by subcontractors working on the RM9 billion littoral combat ships (LCS) project, Rafizi Ramli claimed.

The PKR deputy president said this meant that these parties were making a 200% commission at the government’s expense.

Boustead Naval Shipyard Sdn Bhd (BNS), who was in charge of the LCS project, had awarded Contraves Advanced Devices Sdn Bhd (CAD) a RM1.19 billion contract on April 9, 2012.

CAD subsequently appointed Contraves Electrodynamics Sdn Bhd (CED) as its subcontractor on the same day.

CED then issued a letter of award to French naval vessel maker Naval Group, formerly known as DCNS.

“Investigations showed that these two packages, which were finalised at RM1.19 billion with the Malaysian government and awarded to DCNS, were only valued at RM397 million,” Rafizi said in a statement on Facebook.

“This means that DCNS invoiced CED for RM397 million, but the claim from CED and CAD to the Malaysian government (through BNS) is three times more expensive.

“The main question now is who is the shark with the authority to direct and protect certain officers in the BNS to commit robberies in broad daylight like this?”

Rafizi also questioned why the government had not appointed the Naval Group directly.

“Although the decision was explained as an initiative to aid army veterans, appointing two levels of subcontractors before arriving at the final supplier (Naval Group) implies a misconduct from the beginning.”

He also took a dig at former prime minister Najib Razak’s attempt to deflect blame to the Pakatan Harapan (PH) government over the project’s failure.

“He gave the impression that the failure is a result of bureaucratic weakness… due to PH’s decision to investigate this project. He has tried to deceive his followers that this scandal has no element of corruption at all.”

On Thursday, the Public Account Committee (PAC) revealed that not a single ship had been delivered to the navy after the government paid BNS RM6 billion.

The PAC also said that the terms and conditions of the LCS contract were unfavourable to the government, as payment for the project was based on development and item procurement instead of the actual construction progress of the ships. 

According to the original schedule, six vessels should have been delivered by this month. – August 9, 2022.