There will be no delays in the construction of littoral combat ships (LCS) although two contractors appointed by Boustead Naval Shipyard Sdn Bhd (BNS) have had their contracts terminated.
This is the assurance given by BNS, the main contractor behind the LCS project following the termination of Contraves Advanced Devices Sdn Bhd (CAD) and Contraves Electrodynamics Sdn Bhd (CED).
Both companies, which were previously entrusted to purchase equipment from original equipment manufacturers (OEMs) to build the vessels, recently had their letters of award (LOAs) voided amid allegations surrounding the LCS scandal.
"We do not foresee the termination of CAD and CED will delay the project.
"BNS is committed to delivering the vessels in accordance with the new schedule, which is to be negotiated with the government," BNS chief executive officer Azhar Jumaat was quoted as saying by The Edge.
"The termination will allow BNS to negotiate directly with the relevant OEMs and this can be done within the proposed delivery period for the vessels," he said.
Azhar, however, said the OEMs in the current contract will remain involved in the project, as BNS is only terminating the intermediaries.
"The contract termination only refers to removing intermediaries. We are not replacing OEMs appointed through CAD and CED. Thus, there is no issue with the nomination of new contractors.
“And there is no additional cost to the government (to complete the vessels) due to the termination of CAD and CED," Azhar said.
On Aug 8, Senior Defence Minister Hishammuddin Hussein said he expected the first of six vessels to be delivered in two years’ time, despite an initial target date in 2019.
He said the first vessel will not involve new allocations from the government.
The Sembrong MP added that "additional allocations" for the LCS project will only be considered after the first of the six ships is delivered.
A media tour of the LCS shipyard in early last month revealed that five of the six ships are under construction, with the first ship being only 60 percent complete as of April.
A Public Accounts Committee report (PAC) on the project revealed a huge cost overrun amounting to RM1.4 billion in the RM9 billion contract, with RM6 billion paid as of 2020.
As for the remaining vessels’ completion, Azhar previously said that LCS2 was 48 percent complete, followed by LCS3 (43 percent), LCS4 (36 percent), LCS5 (22 percent), while construction for LCS6 has not begun. - Mkini
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