RM9b price tag for six combat ships

There are no cost overruns in the RM9 billion contract to build six ships for the navy spread over two Malaysia Plans, the Defence Ministry says.

KUALA LUMPUR: Six Littoral Combat Ships (LCS) to be built for the Royal Malaysian Navy (RMN) will cost RM9 billion over the span of two Malaysia Plans.

The Defence Ministry explained this to MPs from both sides of the political divide in a “briefing session” at its headquarters earlier today, Pakatan Rakyat MPs told reporters.

Machang MP (PKR) Saifuddin Nasution said that Defence Minister Ahmad Zahid Hamidi had told Parliament last year that the ships’ collective ceiling price was RM6 billion during the 10th Malaysia Plan, leading to the confusion.

“The confusion was because the minister’s explanation did not state that (the price was) spread over the two Malaysia Plans,” he said, referring to the 10th and 11th Malaysia Plans.

The additional RM3 billion, according to Saifuddin, would be spent during the 11th Malaysia Plan.

“The ministry secretary-general (Ismail Haji Ahmad) said that the RM3 billion was also for the ships’ construction, but (was placed) under the 11th Malaysia Plan. This was explained in the Letter-of-Intent by the ministry to (LCS shipbuilder) Boustead (Naval Shipyards),” he added.

Saifuddin was among three Pakatan Rakyat MPs and five Barisan Nasional MPs that met with the Defence Ministry’s top management and the military’s chiefs of staff in a two-hour session today.

In December 2011, Boustead said that it had won a RM9 billion deal to build the six LCS for the government. This was a contrast with the government’s initial RM6 billion announcement over the ships.

For mainstream media

The MPs present today included Petaling Jaya Utara MP (DAP) Tony Pua, Kuala Selangor (PAS) MP Dzulkefly Ahmad, Kota Belud MP (Umno) Abdul Rahman Dahlan, Rembau MP (Umno) Khairy Jamaluddin, Hulu Selangor MP (MIC) P Kamalanathan, Jasin MP (Umno) Ahmad Hamzah and Kinabatangan MP (Umno) Bung Mokhtar Radin.

FMT, along with other online media representatives, were not allowed to observe the session, or participate in the subsequent press conference.

Defence Ministry public relations officer Haslinda Rahim barred FMT, saying: “Sorry, the opposition media is not allowed in. Only the mainstream media.”

Pakatan MPs said that while they were privy to the contents of the Letter-of-Intent, they were not briefed on the full details behind the ships’ full cost.

Another matter raised during the session was a Parliamentary Oversight Committee, designed to monitor the country’s military procurement.

According to Pua, the ministry did not reject the idea, but did not approve of it either.

“The ministry didn’t want to agree to it immediately, but it didn’t want to reject either. Even the minister himself mentioned, ‘If Parliament decides it will be set up, we will abide by it’,” he said.

Asked if Pakatan MPs were satisfied with the ministry’s response, Pua simply said: “I will leave it up to you to decide.”

Clear parameters

Later, Abdul Rahman told reporters that the RM9 billion had been quoted by the navy as far back as 2008.

“Any procurement as big as this has to be spent throughout the years. Without a doubt, the government approved a ceiling (price) of RM9 billion for this project… the other RM3 billion was to be spent during the 11 th Malaysia Plan,” he said.

He criticised the opposition for blowing up the issue, instead of coming to the ministry for answers.

“I’m sure the ministry would be more than happy if he (Pua) wants to see if the amount was quoted in 2008 or not,” he said.

Though supportive of the oversight committee, Abdul Rahman nevertheless had his doubts. He said that any group of that sort needed to have clear parameters, as it was dealing with national security matters such as military procurement and intelligence.

“It is quite difficult to make people understand until they have been in government. They are things which cannot be disclosed publicly for military reasons.”

“Even the minister said he had no problem with it…We need to go to our fellow colleagues and find out what the terms of reference (for the committee) are,” he said.