Vessels expected only in 2029

THE littoral combat ship (LCS) project is facing delays again, and the vessels will only be ready by 2029, says the Public Accounts Committee (PAC).

In its report published on the official Parliament website yesterday, the committee said the delay had caused the construction cost to balloon to RM11.22bil.

“The LCS construction period has been extended for 83 months,” it said, adding that following the delay, the Navy would only be able to obtain all five ships in 2029, not 2022 as stated in the original contract.

The report also said that there had been no progress on the construction of the first ship between Dec 11, 2021, and June 10, 2023.

Although the number of LCS has been reduced (from six) to five, the report said the cost of the vessels increased from RM9.128bil to RM11.22bil.

The additional cost came from the rise in equipment prices (RM1.214bil), cost of design (RM0.211bil), insurance and risk (RM0.466bil), financial costs (RM0.143bil), project management (RM0.066bil).

PAC also said that the main issue of the LCS detailed design had yet to be resolved, with only 84% having gone through the confirmation, verification and approval stage by the ship’s design supervisor, Naval Group from France.

“However, the contractor has assured that the detailed design will be completed before August 2024.”

According to the committee, the ministry had signed the sixth supplementary agreement (SA 6) on May 26 without getting approval from the Attorney General’s Chamber (AGC), despite being advised to do so.

“Mindef’s decision to turn its back on the AGC in signing SA 6 is an inappropriate action because it can lead to legal implications against the government, and this (action) must not be repeated,” it said.

Due to this, PAC has urged the ministry to ensure the implementation of the mobilisation plan is in accordance with the conditions that have been set, with the first LCS ship being completed by May 2024 and handed over to the Navy by August 2026.

PAC has also suggested the government ensure the acquisition of Boustead Naval Shipyard by Ocean Sunshine achieves the intended goal.

“Mindef and the Navy are responsible for ensuring that the entire construction project of five LCS is completed and handed over to the Navy according to the agreed period and cost in SA 6.

“The ministries and government agencies (involved) must ensure that the draft contract negotiated with the company has been consulted, reviewed, and approved by the AGC first before signing.

“The Auditor General’s Department needs to carry out an audit before LCS 1 is handed over to the Navy and presented in Parliament,” the report added.

Defence Minister Datuk Seri Mohamad Hasan expressed confidence that the construction of the five vessels would be done according to the new schedule, adding that the delay would not cause any significant issues.

“Building a ship is not easy, especially since this is concerning combat ships, which means there would be weapons installed on the vessels.

“Even a mere 0.01% error could cause a big problem. After the construction is completed, we have to do a harbour test, which takes six months, and after that, we need to go for an open sea test, and that is another few months,” he told a press conference at Parliament here yesterday.