Zahid to give full cooperation on PAC probe into combatant ship project

PETALING JAYA: Datuk Seri Dr Ahmad Zahid Hamidi (pic) has said he will give his full cooperation to assist the Public Accounts Committee (PAC) into their investigation over the RM9bil supply of six littoral combatant ships (LCS) to the Defence Ministry.

He said however that the issue of failure to deliver the ships by Boustead Naval Shipyard (BNS) Sdn Bhd was only highlighted in 2019, long after his tenure as defence minister.

"I was the defence minister from April 2009 until May 2013.

"However, as pointed out by PAC chairman Wong Kah Woh, I believe the issues on the failure of BNS to deliver the LCS accordingly was only highlighted in 2019.

"I would also like to state that these ships are being tasked to BNS which is owned by Boustead Holdings Berhad, and two of its largest shareholders are the Armed Forces Fund Board (LTAT) and Retirement Inc Fund (KWAP), which both belong to the government," he said in a statement on Friday (Dec 18).

Zahid also said that contract was awarded in accordance of the Guidelines for Application of Direct Negotiation Procurement, stating that the procurement of projects, particularly by way of direct negotiation, can only be made upon approval by the Finance Ministry and was not from the defence minister.

On the issue of late delivery fees in 2019, Zahid said the Defence Ministry had clarified that it had forwarded a Letter of Demand, aimed at recovering the late delivery fees from the responsible party to a controlling officer for approval was, however, to no avail.

"Lastly, I believe that the Ministry of Defence had also made clarifications on the issue of progressive payments. I strongly affirm that the payments were made in 2019 when I was not the Minister of Defence.

"Therefore, I had no knowledge and control over any decisions made by the ministry to proceed with the progressive payments," he said.

He said he understood that PAC is responsible in enhancing and maintaining government structure and administrative framework of accountability in Malaysia.

“However, I strongly believe that PAC should exercise more caution to disclose details of the ongoing investigation, particularly on matters of national security, especially when this is at an investigative stage and no findings have been established yet.

“This contention, however, should not and will not defeat my intention in giving full cooperation and my best ability to assist the committee in the on-going investigation, ” added Zahid, who is also the former deputy minister.

On Thursday (Dec 17), Wong reportedly said in Parliament that several individuals, including Zahid, would be questioned by the PAC over the LCS project.

Wong also said former navy chief admiral Tan Sri Abdul Aziz Jaafar and a representative from BNS, the main contractor of the LCS, will be questioned in the proceedings that will resume in early January, followed by a visit to the LCS ship construction site in Lumut, Perak.

The PAC has held four meetings and proceedings over the issue where Auditor-General (A-G) Datuk Nik Azman Nik Abdul Majid, Defence Ministry secretary-general Datuk Muez Abd Aziz, and former A-G Tan Sri Ambrin Buang and several other individuals had been questioned.

It was reported that RM5.94bil was paid to BNS for the project that was commissioned in 2014.

The first LCS ship was set to be delivered in April 2019. However, none of the ships has been built to date.

In September, former deputy defence minister Liew Chin Tong had revealed that RM1bil paid for the LCS ships could not be traced.

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