The Malaysian Insight

THE littoral combat ship (LCS) scandal is a “definitive textbook” on how not to conduct defence procurement, Public Accounts Committee (PAC) chairman Wong Kah Woh said today.

Expressing disappointment and sadness over the state of the project, Wong said something had gone gravely wrong, beyond mismanagement.

“The absorbing horror story in the whole process of the LCS project shall serve as a lesson to all who are in power, now and in the future,” Wong said in a statement.

“It is more than mismanagement. Something is gravely wrong with those who were in power and those who got the contract.”

Wong, who visited the LCS site at the Boustead Naval Shipyard Sdn Bhd’s (BNS) dockyard in Lumut, Perak, in December 21 last year said it was heart-breaking to see the condition of the ships under construction and the billions of ringgit worth of equipment that were lying around in storage.

“We were told the total equipment value in storage is RM1,757,791,266.02. I asked BNS how much of it had become obsolete, the answer given was approximately 15%. Meaning an approximate loss of RM263,668,689.90,” Wong said.

The PAC report found that BNS owed original equipment manufacturers RM801 million and banks another RM956 million.

The site itself, Wong said, was empty of workers.

“There are no longer workers at the construction site — no locals and no foreigners. No contractors. No longer any on-going works.

“Totally zero, totally stalled. It is heart-breaking; as we all know, RM6 billion was already spent.”

Malaysia was rocked again recently with the longstanding LCS procurement issue back in the spotlight after the PAC released its report on the procurement failures.

The report disclosed that it had held nine proceedings starting from November 18, 2020, with the last one held on March 8 this year, by calling several witnesses.

The PAC found that the contract was awarded to BNS via direct negotiations, with the government paying RM6.08 billion, but not even one LCS had been delivered.

According to the original schedule, five ships should have been ready and handed over by this month.

The project was started under the Najib Razak administration, when Umno president Ahmad Zahid Hamidi was defence minister. – August 12, 2022.