KUALA LUMPUR: The RM571.9mil paid for Norway-made Naval Strike Missile (NSM) systems was made in accordance with the terms of the contract and was not an advance payment, says Defence Minister Datuk Seri Mohamed Khaled Nordin.
Mohamed Khaled told the Dewan Rakyat that, at the time the payment was made, all NSM systems had been fully produced.
"They had also successfully passed the tests set by the Navy and were ready for delivery to Malaysia.
"As such, the payment was made in accordance with the contractual terms and was not an advance payment made without corresponding physical progress," he said in a written parliamentary reply on Wednesday (July 1).
Norway previously announced that it had revoked the export licence for the NSM anti-ship missiles and their associated launcher systems to Malaysia on national security grounds.
The NSM is a long-range anti-ship missile capable of carrying out maritime strike missions at high subsonic speed, with a range of more than 300km.
Mohamed Khaled was responding to Hassan Abdul Karim (Pakatan Harapan–Pasir Gudang), who had asked why the government made an early full payment for the contract.
Rejecting claims that the contract lacked clauses to safeguard the government's interests, Mohamed Khaled said it contains provisions allowing the government to take action in the event of non-performance or a breach of contractual obligations by the relevant party.
"In this case, the Norwegian government's revocation of the export licence was beyond the control of both the Malaysian government and the supplier.
"As such, the ministry is invoking the relevant contractual provisions to safeguard the government's interests, including pursuing claims to recover the payment and any related damages," he said.
