Minister denies PAC claim LCS deal signed without consulting AGC

PARLIAMENT | Defence Minister Mohamad Hasan stresses that his ministry had taken into account all of the Attorney-General Chamber’s (AGC) comments when entering into an agreement over the littoral combat ship (LCS) project.

This comes after the Public Accounts Committee (PAC) published a report earlier today, claiming that the ministry had signed the sixth supplemental agreement with Boustead Naval Shipyard Sdn Bhd in May without the AGC’s approval.

“The report says that we did not take into account the AGC’s views. That is totally wrong because, in the processes and negotiations, there was an Attorney-General representative (present). We even used the AGC’s policies.

“But (on the matter of) getting black and white (approval) from AGC before signing the sixth supplementary agreement, I think that is an overlook on our part,” he told a press conference in Parliament today.

The PAC in its report published today said that the Defence Ministry was informed it had to take further action and submit the sixth supplemental agreement to the AGC for approval prior to it being signed.

The sixth supplementary agreement was signed at the 2023 Langkawi International Maritime and Aerospace Exhibition (Lima 2023) in May.

According to parent company Boustead Holding’s filing to Bursa Malaysia, the sixth supplemental contract requires its subsidiary Boustead Naval Shipyard (BNS) to deliver five LCS instead of six.

The total contract price was revised to RM11.2 billion, up from RM9 billion previously. The government had already disbursed RM6 billion.

The LCS project began in 2013 but after RM6 billion was spent, BNS missed the 2019 deadline to deliver the first ship.

The PAC said in tis report that no progress in the construction of the LCS ships since its visit on Dec 11, 2021.

The committee held a working visit to inspect the progress of the LCS construction works and storage on June 10 this year, which was followed by a committee proceeding.

As such, it advised the defence ministry to adhere and ensure that the conditions listed in the sixth supplementary contract are met. - Mkini