FMT:
LCS total cost revised to RM11.2bil
The first vessel will be delivered and fully tested in August 2026.
The LCS project is said to be the largest defence procurement in Malaysia’s history, and had initially cost RM9 billion.
PETALING JAYA: The total cost of the navy’s troubled littoral combat ship (LCS) project has been revised to RM11.2 billion, up from RM9 billion previously, says Boustead Holdings Berhad (BHB).
This comes after BHB’s subsidiary Boustead Naval Shipyard Sdn Bhd (BNS) signed a sixth supplemental contract for the project with the government today.
In a Bursa filing, BHB said all design and construction activities for the five naval ships resumed with the signing of the contract.
The company said the first vessel will be delivered and fully tested in August 2026, while the fifth ship is expected to be delivered in April 2029.
“The total contract price is revised to RM11.2 billion following, among others, the approved change of specifications and extension of time.
“The terms of payment are varied from milestone activity to progress of works reflecting the various elements in the contract, based on weightage to the design, equipment, construction and trials, as well as commissioning,” said BHB.
In a statement earlier, BHB said a new monitoring committee will be formed to ensure the completion of the project and prevent past mistakes from recurring. The committee will be co-chaired by the secretaries-general of the Treasury and defence ministry.
BHB chairman Nazim Rahman said BNS significantly strengthened its governance when the project was put on hold.
The supplemental contract was signed by defence ministry secretary-general Muez Abd Aziz and Nazim, and was witnessed by defence minister Mohamad Hasan.
On May 19, the Public Accounts Committee (PAC) said it would hold fresh proceedings into the controversial LCS project.
The LCS project, said to be the largest defence procurement in Malaysia’s history with a total cost of RM9 billion, came under intense scrutiny last year after the PAC revealed that not one of the six ships had been completed although Putrajaya had already paid RM6.08 billion.
In February, Mohamad said the cost for the project would remain the same although the navy would only receive five frigates instead of the original six.
He said there would be no reduction in the cost of the RM9 billion project that had been previously approved due to the many variations from the original order and inflation.
The project had been awarded to BNS through direct negotiation, and the Malaysian Anti-Corruption Commission – which investigated the project – had previously recommended that several individuals be charged in relation to the project.
PETALING JAYA: The total cost of the navy’s troubled littoral combat ship (LCS) project has been revised to RM11.2 billion, up from RM9 billion previously, says Boustead Holdings Berhad (BHB).
This comes after BHB’s subsidiary Boustead Naval Shipyard Sdn Bhd (BNS) signed a sixth supplemental contract for the project with the government today.
In a Bursa filing, BHB said all design and construction activities for the five naval ships resumed with the signing of the contract.
The company said the first vessel will be delivered and fully tested in August 2026, while the fifth ship is expected to be delivered in April 2029.
“The total contract price is revised to RM11.2 billion following, among others, the approved change of specifications and extension of time.
“The terms of payment are varied from milestone activity to progress of works reflecting the various elements in the contract, based on weightage to the design, equipment, construction and trials, as well as commissioning,” said BHB.
In a statement earlier, BHB said a new monitoring committee will be formed to ensure the completion of the project and prevent past mistakes from recurring. The committee will be co-chaired by the secretaries-general of the Treasury and defence ministry.
BHB chairman Nazim Rahman said BNS significantly strengthened its governance when the project was put on hold.
The supplemental contract was signed by defence ministry secretary-general Muez Abd Aziz and Nazim, and was witnessed by defence minister Mohamad Hasan.
On May 19, the Public Accounts Committee (PAC) said it would hold fresh proceedings into the controversial LCS project.
The LCS project, said to be the largest defence procurement in Malaysia’s history with a total cost of RM9 billion, came under intense scrutiny last year after the PAC revealed that not one of the six ships had been completed although Putrajaya had already paid RM6.08 billion.
In February, Mohamad said the cost for the project would remain the same although the navy would only receive five frigates instead of the original six.
He said there would be no reduction in the cost of the RM9 billion project that had been previously approved due to the many variations from the original order and inflation.
The project had been awarded to BNS through direct negotiation, and the Malaysian Anti-Corruption Commission – which investigated the project – had previously recommended that several individuals be charged in relation to the project.
Not bad for BNS.
ReplyDeleteThe moral of the story is get succeeding Defence Ministers sign off the negotiated contracts and not deliver a SINGLE ship despite getting paid about two thirds the contract amount.
Not only will that get you more time to complete the contracts (for which you had already received significant payment), the contract sum will be enhanced.
And the cherry on top is BNS will soon to be taken over by the government SPV (Special Purpose Vehicle). I am not sure of the implication of this move but it does not smell right.
Honestly, I am dumbfounded by the latest developments undertaken by the Madani government.
Yes, this is Malaysia, Truly Asia.