Defence Ministry: France's Naval Group committed in meeting LCS project deadline


KUALA LUMPUR: France's Naval Group has given its assurance in supporting the government's efforts in resuming the Littoral Combat Ship (LCS) project.

The Defence Ministry said the Naval Group also expressed its commitment in ensuring the LCS ship is completed within the time frame set by the government.

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"The company also agreed to resume talks with Boustead Naval Shipyard Sdn Bhd (BNSSB) on the price," the ministry said in a statement on Friday (Oct 21).

The latest development is a significant and positive step in the LCS project and will be able to strengthen efforts to ensure the project resumes smoothly, the ministry said.

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This follows a discussion between a Malaysian delegation and Directorate General of Armaments (DGA) international directorate director Gaël Diaz De Tuesta, France's Defence Ministry and the Naval Group recently.

"The Malaysian delegation consisted of ministry secretary-general Datuk Seri Muez Abd Aziz, deputy Navy chief Admiral Datuk Abdul Rahman Ayob and Armed Forces Fund Board (LTAT) chief executive Datuk Nazim Rahman as well as several others.

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"The meeting was conducted during a working visit to Euronaval in France," the ministry said.

Earlier this month, Defence Minister Datuk Seri Hishammuddin Hussein said the mobilisation phase for the LCS project was running smoothly.

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He said this phase, slated for June to December this year, involved a number of efforts by the government, especially his ministry, the Royal Malaysian Navy, LTAT and BNSSB.

A number of matters were concluded in the first three months of the phase, he added.

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"On the commercial side, two things are going on. BNSBB has concluded talks with 145 local vendors and 42 overseas original equipment manufacturers (OEMs).

"The local vendors and OEMs have pledged to support... BNSBB to resume this project.

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"Efforts to end the involvement of middlemen Contraves Advanced Devices (CAD) and Contraves Electrodynamics Sdn Bhd (CED) are currently being pursued.

"It will enable BNSBB to negotiate with OEM and vendors directly. This can reduce the cost of ship equipment," he said.

On Aug 4, the Parliament’s Public Accounts Committee (PAC) revealed that some RM1.4bil in government allocations for the LCS project had been used for other purposes, including cost overruns.

The two-year probe by PAC also revealed that the RM9bil project was done through direct negotiations with BNSSB and was inked in 2014.

Two reports were subsequently declassified, including the one by the governance, procurement, and finance investigation committee, which said that the cost of completing the six LCS might balloon to RM11.145bil.

On Aug 17, former Navy chief Tan Sri Ahmad Ramli Mohd Nor, who is the former managing director of BNSSB, was charged with three counts of criminal breach of trust involving RM21.08mil over the project.

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