KUALA LUMPUR: A special committee has been set up to assess legal action and compensation to be claimed after Norway cancelled the naval strike missile (NSM) procurement contract, says Datuk Seri Mohamed Khaled Nordin.
The Defence Minister said the move was necessary as the government had paid nearly 95% of the contract value, amounting to more than RM500mil.
“A special committee has been set up to detail the claims, which involve not only the refund of the original payment but also compensation arising from the breach of contract,” he told reporters after an event.
Meanwhile, Prime Minister Datuk Seri Anwar Ibrahim said that Malaysia protests Norway’s decision to revoke the export licence for the NSM system.
He said the objection was conveyed directly to Prime Minister Jonas Gahr Store during a telephone conversation, describing Norway’s unilateral decision as unacceptable.
He said Malaysia had fulfilled all obligations under the defence contract since 2018, scrupulously, faithfully and without equivocation.
“Norway, it appears, has not felt compelled to extend us the same courtesy and demonstration of good faith,” Anwar said in a Facebook post.
“I made it plain that this decision will have grave consequences for Malaysia’s defence operational readiness and the Littoral Combat Ship (LCS) modernisation programme.
“It will undoubtedly carry broader ramifications for the regional balance.”
On another matter, Mohamed Khaled said the ministry was also evaluating several alternatives to replace the NSM system, adding that a committee would study suitable replacement systems that can be supplied within a short timeframe.
However, he said the process was not straightforward as the missile system must be compatible with the ships’ existing communication, electrical and operational systems.
Khaled also said the cancellation of the missile would not affect the delivery schedule of the first LCS, KD Maharajalela, to the navy this year.
“The LCS programme will continue as planned, except that the vessel will not be equipped with a surface-to-surface missile system yet,” he said.
According to the Kongsberg Defence & Aerospace website, the procurement contract was signed between the Royal Malaysian Navy and the company in April 2018, and valued at RM571.9mil, to equip six new LCS vessels.
The Norwegian Foreign Ministry has reportedly withdrawn several export licences related to certain technologies as part of the country’s move to tighten export controls.
