The government has no choice but to take over the construction of the littoral combat ship (LCS) project, originally under Boustead Naval Shipyard Sdn Bhd (BNS), to ensure that the project is fully completed.
Prime Minister Anwar Ibrahim explained that the government had spent RM6 billion on the project.
“It (Boustead) has ongoing projects that must be completed, including LCS.
“We (the government) have no choice, we have spent RM6 billion, and it (the LCS project) can’t be closed.
“We have to take over, we have to complete it,” he told reporters after launching the Kuala Lumpur International Book Fair at WTCKL today.
However, he said a complete statement would be issued regarding this matter.
Yesterday, Defence Minister Mohamad Hasan said the Finance Ministry had established a special purpose vehicle (SPV) to take over the company responsible for the LCS construction project, with BNS as a subsidiary.
However, Mohamad said the project will still be monitored by the Project Monitoring Committee (PMC) jointly chaired by the Treasury secretary-general and the Defence Ministry secretary-general.
The project
According to parent company Boustead Holding’s filing to Bursa Malaysia yesterday, the sixth supplemental contract signed yesterday will require its subsidiary BNS to deliver five LCS instead of six.
However, the total contract price has been revised to RM11.2 billion, up from RM9 billion previously. The government has 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.
As of last year, construction of the sixth vessel has yet to begin and none of the vessels has progressed beyond the 50 percent mark.
A Public Accounts Committee probe on the matter revealed that the navy’s requirement for the project was ignored by the government and due diligence had failed to establish BNS’ financial difficulties. - Mkini
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