LCS: Teo wants Najib to explain sweetheart deal for BNS

 

Najib Abdul Razak has been urged to explain why he, when he was the finance minister, gave favourable treatment to the main contractors of the navy’s littoral combat ships (LCS)

In a statement today, DAP publicity secretary Teo Nie Ching said late delivery charges for each LCS were capped at RM180 million.

Teo said the Public Accounts Committee (PAC) noted that the federal government was entitled to claim liquidated ascertained damages (LAD) of RM116.54 million by Dec 31, 2019, because the delivery of the first LCS was already 245 days late.

By extrapolating this number to July 31 this year, Kulai MP Teo noted that the LAD would be as high as RM582.12 million.

“The delivery of LCS2, LCS3, and LCS4 is also late. Simple calculation would show that by July 2022, the total LAD by days for LCS1 to LCS4 should be RM1.57 billion, but the total LAD claimable by the government is only RM671 million, due to the RM180 million LAD capping per ship.

“What was the rationale for inserting a cap of RM180 million in the contract, which only benefits Boustead Naval Shipyard Bhd (BNS) and puts the government in a very detrimental position?" asked Teo.

Teo also urged Najib (above) to explain why he ignored the Malaysia Treasury Circular (No 5 of 2007) (Pekeliling Perbendaharaan Bil 5 Tahun 2007) which states that a maximum 25 percent of the contract sum, or RM10 million, whichever is lower, could be paid as advance payment in any contract.

DAP publicity secretary Teo Nie Ching

“However, RM1.36 billion was paid by the government to BNS as advance payment, way above the limit allowed under the Finance Ministry’s financial guideline, causing the acceptance letter (Surat Setuju Terima) to be amended twice.

“More importantly, such payment could only be made with the approval of the Finance Ministry. Could Najib, as the finance minister then, explain to us under what situation the approval was given?” Teo asked.

Last week, the PAC tabled its report on the procurement of the LCS to the Dewan Rakyat, which highlighted numerous irregularities in the project.

It was approved in 2011. At the material time, Ahmad Zahid Hamidi was the defence minister while Najib was both prime minister and finance minister.

After the report was released, Najib had blamed the late delivery of the ships on the previous Pakatan Harapan government for freezing the project in late 2019.

- Mkini