KUALA LUMPUR: The initial discussions with Kongsberg Defence and Aerospace (KDA) regarding the cancellation of the Naval Strike Missile (NSM) delivery are scheduled for mid-August, says Datuk Seri Mohamed Khaled Nordin.
The Defence Minister said the main objective is to discuss the contract’s status and seek an amicable solution.
This includes the contract’s obligations, the Malaysian government’s demands and further steps both parties can take.
“The government’s priority is a solution that provides the best benefits, saves time and aligns with the country’s interests,” he said during a ministerial explanation in the Dewan Rakyat on Monday (July 6).
He said the ministry is also taking immediate steps to ensure the Navy’s operational readiness is not impacted by the move.
The Navy, he said, is conducting in-depth studies and evaluations towards surface-to-surface missiles that can possibly replace the NSM system produced by KDA.
“If all goes well, this is expected to be complete by the end of this month, before moving on to the next evaluation phase,” he said.
According to the minister, several original equipment manufacturers across various countries have also been identified to potentially supply guided missiles to replace the NSM system.
“The proposals and offers will be evaluated comprehensively based on the Navy’s operational requirements,” he said.
He said this includes its integration with the Littoral Combat Ship’s Combat Management System, the delivery period, overall costs and whether its technological and operational capacities are on par or even exceed the NSM system.
Mohamed Khaled said the current episode also served as a reminder that a heavy dependence on external suppliers brings a big strategic risk.
“The long-term solution is not just about finding a replacement missile - it also demands reducing reliance on foreign sources or technologies and developing the local defence industry.
“That is also why the government is stepping up efforts on the National Defence Industry Policy to empower the ability and capacity of local defence industries, including through the production of rockets and missiles,” he said.
Mohamed stressed that the government will protect Malaysia’s rights and sovereignty through diplomatic and legal avenues.
The Norwegian government was previously reported to have revoked the export licence for the NSM anti-ship missiles and their launch systems on security grounds.
According to the KDA website, the missile deal was signed with the Royal Malaysian Navy in April 2018 at EUR124mil (RM571.9mi) to equip six new Littoral Combat Ships (LCS).
Following the cancellation, Malaysia is claiming RM1.06bil from Kongsberg, comprising EUR129.86mil (RM604mil) in direct claims for payments already made, plus EUR96.26mil (RM448.12mil) in indirect claims covering cost implications and knock-on effects from the failed supply.
