LCS project not the first bailout, certainly not the last

 

ADUN SPEAKS | Will the rescue plan involving the injection of RM4 billion keep the Littoral Combat Ship (LCS) project alive?

There have been countless government financial rescue operations in the past to resuscitate ailing bumiputera companies and individuals.

I am not sure that government financial rescue operations have indeed succeeded in turning around companies.

A major audit exercise in the form of a Royal Commission of Inquiry is yet to be appointed to ascertain the financial and political viability of these government rescue operations.

The financial resuscitation measures undertaken over decades have been shrouded in mystery.

But one thing is sure, the country’s 33 million people have been the sure losers, not the political and financial elite.

Despite our colossal and shameful failures, the governments in charge have never learnt any valuable lessons in these man-made financial disasters.

But on the contrary, attempt more rescue operations to bail out those who are well-connected to those in power and position.

This is precisely happening in the latest decision to inject an amount of RM4 billion to rescue the procurement of the LCS project.

This project, part of the "15 to 5" transformation plan of the navy, was awarded to Boustead Shipyard, where the majority shareholder is the Armed Forces Fund Board ( LTAT).

The naval procurement project was for the purchase of six state-of-the-art vessels by 2050.

However, the delivery of the first ship from France has been delayed for various reasons, mainly financial.

Despite the initial funding of RM6 billion for the naval procurement project, Boustead Shipyard is in a deep financial mess.

If the government fails to inject the much-needed funds to resuscitate the project, it will result in a colossal failure.

No delivery date

It was decided a few days ago that the government would pump a further RM4 billion in financial assistance to ensure that the LCS project remains afloat.

Defence Minister Hishammuddin Hussein announced that the rescue package was to assist the 100, primarily bumiputra, vendors and at the same time, continue with the modernisation process of the navy in the purchase of the intended six ships from France.

Hishammuddin might establish the two priorities as to why the procurement project of the combat ships needs to be rescued.

Since the injection of the additional funds is not so much to continue with the LCS procurement project but more to rescue both the Boustead Shipyard and the parent company LTAT than anything else.

Even the first ship that was supposed to have been delivered is yet to make its appearance in the country.

I understand that the vessel’s delivery has been postponed without a definite delivery date.

Even before the government could bail out Boustead Shipyard, there were a number of individuals involved in the procurement arrested.

They are yet to be charged. In other words, something was really amiss with the procurement project from the start.

But then why allow for additional funds when there was corruption and financial abuse.

No sane or responsible government would have gone for the additional injection of funds without getting the full benefit of a major audit.

Again, this present government, like the earlier ones, never learns its lessons.

The decision-makers in the government should try to understand the reasons why the previous Sri Lankan government collapsed under the weight of its inflicted wounds.

No country, even China, could come to the full rescue of the beleaguered nation.

The caretaker government had no choice but to agree to the entire financial package of the International Monetary Fund (IMF).

Sri Lanka, under the conditions of financial deprivation, had to follow the dictates of the IMF.

Malaysia might not be too far off from following the disastrous road travelled by Sri Lanka.

Malaysia is not too far off from the mess created by corruption, excessive bailouts of cronies and the governance predicated on excessive race and religion.

This LCS naval procurement project is not the first bailout and certainly not the last. - Mkini

---

P RAMASAMY is Perai assemblyperson and Penang deputy chief minister II.

The views expressed here are those of the author/contributor and do not necessarily represent the views of MMKtT.