Boustead bailout: No choice as ongoing projects must be completed - PM
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.
Prime Minister Anwar Ibrahim
However, he said a complete statement would be issued regarding this matter.
READ MORE: KINIGUIDE | A littoral dive into the navy's RM9b LCS scandal
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.
However, he said a complete statement would be issued regarding this matter.
READ MORE: KINIGUIDE | A littoral dive into the navy's RM9b LCS scandal
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.
Throwing good money after bad.
ReplyDeleteMadani is now complicit in the utter corruption of the LCS project!
ReplyDeleteWith the value now raised to MR11.5 bil and the number of ships reduced to 5, it simply means each ship is priced at MR2.3 bil.
However, if we just consider the original contract ie based on 6 ships, the budget was MR1.5 bil each (MR9 bil for 6 ships)
Now, since the MR6 has already been swallowed up, the new amount of MR5.5 bil is actually the "new" budget for the 5 ships to be completed. Which means based on the "new" contract each ship is priced at $1.1 bil.
I am not impressed that there will now be "monitoring" done by some agencies. Are we to assume in the past nobody was "monitoring" the project?
There are 3 points to note:
1) why are the signatories ie the defence ministers to the earlier contracts not brought to be investigated? The PAC must be more rigorous in its investigation. More heads MUST hold
2) since it is actually a new contract why not have a new open tender? After all the MR6 bil has already disappeared and the new contract amount of MR5.5 bil will be sufficient for 5 ships.
3) the SPV to take over BNS means a bailout and a takeover of a very corrupt company.
Everything stinks to heaven high!!!!