Will heads roll over the LCS fiasco?

 

In 2011, when then prime minister Najib Razak announced that the Malaysian navy would purchase six littoral combat ships (LCS) for RM6 billion, many Malaysians were startled.

The LCS are frigates that can perform complex naval missions of modern warfare, comprising anti-air warfare, anti-surface warfare, anti-submarine warfare and electronic warfare.

One former civil servant said the cost was almost as much as the entire 2011 military budget and asked if it was really necessary.

Coming so soon after the Scorpene submarine scandal, some wondered if this was another opportunity for certain people to make inflated commissions from the deal.

In the early 2000s, there had been a public backlash when the government announced that it would acquire the French-made submarines. The defence minister at the time was Najib Razak.

Some wondered if the country really needed the submarines, while others were worried about the annual service and maintenance costs.

A decade later, the nightmare of the Scorpene scandal is still fresh in their memories.

For many Malaysians, their fears were compounded by the fact that there had been no open tender, the contract had been drafted in such a way that it did not favour the government, and after it was signed, no action had been taken to address the various anomalies which annual auditing reports had uncovered.

The government issued its letter of award to the main contractor, Boustead Naval Shipyard Sdn Bhd (BNS), in December 2011, although the contract for the project was only signed in July 2014. The defence minister then was Ahmad Zahid Hamidi, but by the time the contract was finally signed, Hishammuddin Hussein was in charge of the ministry.

What made matters worse was that the needs and opinions of the end-user, the Malaysian navy, were dismissed, observers said, because in July 2011, BNS was said to have persuaded Zahid to swap the original Sigma system, which was of Dutch origin, to the French Gowind design.

Expressing his concerns and detailing the risks associated by detracting from the original agreed plan, the then admiral of the fleet, Abdul Aziz Jaafar, was reported to have written 10 letters to the prime minister, the deputy prime minister, the defence minister, the chief secretary to the government and the defence ministry secretary-general. He failed to elicit a response from any of them.

The original sum of RM9 billion should have been sufficient for 12 patrol boats, but before these could be built, various issues such as paying-off the bad debts of the main and sub-contractors had first to be settled. This reduced the amount that could have been spent on building the frigates.

As a result of BNS’ alleged bad financial and management decisions, the cost of the patrol boats then ballooned. Despite paying off 67% or RM6 billion, for the LCS, which by any standards is a hefty sum of money, no patrol vessel has been delivered to the navy, nor has any been 100% completed.

The first frigate had been due in 2019, the final one in 2023.

The LCS scandal has sparked the usual blame game. Many questions remain unanswered. Some of the more important ones are these:

• Why was the end-user not consulted about the swap in design systems?
• Did the government exercise due diligence before engaging BNS in this costly project?
• How did the government fail to act on the annual auditor-general’s reports?
• When will these frigates be delivered? By the time BNS gets its act in order, most of the defence systems will probably become obsolete.
• What will it take to stop corrupt politicians and incompetent government officials from repeating this scandalous racketeering?
• What happened to MACC’s final investigative report?
• Who will be made accountable for this betrayal of both our armed forces and the rakyat?
• Will heads roll, or will it be business as usual till the next nightmarish government procurement?
• And, finally, why do we repeatedly fail to learn lessons from past mistakes?

-FMT

The views expressed are those of the writer and do not necessarily reflect those of MMKtT.