NST Leader: Of LCS and leakages
When the first of the LCS was supposed to be delivered in April 2019 but wasn't, the nation was alerted to brewing problems with the RM9.13 billion contract awarded to Boustead Naval Shipyard Sdn Bhd (BNS) in 2011.
BNS was supposed to build the LCS with the help of French naval company DCNS in 2015. All six vessels remain undelivered despite an early payment of RM6.08 billion. So do answers. Muar member of parliament Syed Saddiq Syed Abdul Rahman tried persuading the Dewan Rakyat to get the members of parliament to debate the issue on Friday, but failed.
He failed to convince Dewan Rakyat Speaker Tan Sri Johari Abdul, who said a debate was unnecessary at this stage because the Public Accounts Committee (PAC) was on it and it was being briefed regularly by the Defence Ministry.
While this is true, a four-year wait for answers is a long time. Besides, it is not clear if the PAC is on the hunt for those responsible for the leakages. A debate in the Dewan Rakyat would have clarified this.
The LCS affair has been described variously as a scandal and a fiasco. It is both. The LCS, all six of them, should have been delivered this year, which is halfway through. Do not get us wrong. We are not questioning the need for the Royal Malaysian Navy to have them. But the people need to know why BNS, which was awarded the contract in 2011, didn't deliver as agreed.
Today, the cost is said to be RM11.2 billion. The contract has turned out to be a bad deal for BNS. It has been worse for the government.
It is not that nothing has been done by the government then and the government now. There have been a forensic audit, a suspension and a resumption of the contract. On Aug 16 last year, this newspaper quoted the PAC findings as revealing that there have been discrepancies and delays in the construction of the LCS since 2017.
What is worse, when the first LCS was launched in 2017, it was less than 44 per cent complete. Although several high-profile people were said to have played a role in the scandal, only one person has been charged with criminal breach of trust.
The LCS scandal is a bank of questions in search of answers. Parliament would have done well to debate this rather than allow the people to speculate. Was the one charged acting alone? Unlikely, given the high value and the twists and turns in the deal. Why weren't the high-profile personalities charged? Why was the first LCS launched when it was only 44 per cent complete? And more.
Corruption is robbing the country of billions of ringgit annually. In a recent finding, EMIR Research, a local think tank, disclosed that Malaysia lost RM4.5 trillion to corruption and leakages over the last 26 years. We could have paid our national debt four times over.
EMIR Research is right. Malaysia is designed to succeed, but some plunderers in leadership positions fail us.
Zero tolerance for corruption, if it is to have any meaning, must catch the plunderers in their greed. Telling it all, inside and outside Parliament, will help.
Vessels expected only in 2029
PAC: Costs expected to balloon as LCS project facing delays again
THE littoral combat ship (LCS) project is facing delays again, and the vessels will only be ready by 2029, says the Public Accounts Committee (PAC).
In its report published on the official Parliament website yesterday, the committee said the delay had caused the construction cost to balloon to RM11.22bil.
“The LCS construction period has been extended for 83 months,” it said, adding that following the delay, the Navy would only be able to obtain all five ships in 2029, not 2022 as stated in the original contract.
The report also said that there had been no progress on the construction of the first ship between Dec 11, 2021, and June 10, 2023.
Although the number of LCS has been reduced (from six) to five, the report said the cost of the vessels increased from RM9.128bil to RM11.22bil.
The additional cost came from the rise in equipment prices (RM1.214bil), cost of design (RM0.211bil), insurance and risk (RM0.466bil), financial costs (RM0.143bil), project management (RM0.066bil).
PAC also said that the main issue of the LCS detailed design had yet to be resolved, with only 84% having gone through the confirmation, verification and approval stage by the ship’s design supervisor, Naval Group from France.
“However, the contractor has assured that the detailed design will be completed before August 2024.”
According to the committee, the ministry had signed the sixth supplementary agreement (SA 6) on May 26 without getting approval from the Attorney General’s Chamber (AGC), despite being advised to do so.
“Mindef’s decision to turn its back on the AGC in signing SA 6 is an inappropriate action because it can lead to legal implications against the government, and this (action) must not be repeated,” it said.
Due to this, PAC has urged the ministry to ensure the implementation of the mobilisation plan is in accordance with the conditions that have been set, with the first LCS ship being completed by May 2024 and handed over to the Navy by August 2026.
PAC has also suggested the government ensure the acquisition of Boustead Naval Shipyard by Ocean Sunshine achieves the intended goal.
“Mindef and the Navy are responsible for ensuring that the entire construction project of five LCS is completed and handed over to the Navy according to the agreed period and cost in SA 6.
“The ministries and government agencies (involved) must ensure that the draft contract negotiated with the company has been consulted, reviewed, and approved by the AGC first before signing.
“The Auditor General’s Department needs to carry out an audit before LCS 1 is handed over to the Navy and presented in Parliament,” the report added.
Defence Minister Datuk Seri Mohamad Hasan expressed confidence that the construction of the five vessels would be done according to the new schedule, adding that the delay would not cause any significant issues.
“Building a ship is not easy, especially since this is concerning combat ships, which means there would be weapons installed on the vessels.
“Even a mere 0.01% error could cause a big problem. After the construction is completed, we have to do a harbour test, which takes six months, and after that, we need to go for an open sea test, and that is another few months,” he told a press conference at Parliament here yesterday.
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