Littoral ships must sail on time

Controversial issue: According to the original sche­dule, the first LCS should have been completed in 2019 with the sixth ship delivered this month. However, not a single vessel has been delivered.

THE controversial Littoral Combat Ship (LCS) project, now reduced by one ship to five and at a higher cost, remains in stormy waters.

The number of vessels has been cut down from six to five, while the cost has ballooned from RM9bil to RM11.2bil.

Of this amount, more than RM6bil has already been paid to the contractors.

This cost overrun and reduction in number, underlines the need to ensure accountability and that the project is finished on time as it has dragged on way beyond the stipulated timeline.

According to the original schedule, the first LCS should have been completed in 2019 with the sixth ship delivered this month.

However, not a single vessel has been delivered to date.

With all these lapses and shortfalls as revealed in past audits, there is a need for extra oversight.

This is where the Public Accounts Committee (PAC) comes in.

The PAC was dissolved in October last year, along with the dissolution of Parliament and was only reinstituted in April.

The newly-appointed PAC should now hold a meeting on the LCS project, covering the progress of the ships’ construction since last October.

Being on the PAC’s radar will serve as a reminder that there are checks and balances.

The committee had recommended in its audit report in August 2022 that the Defence Ministry should provide a quarterly progress report on the LCS construction.

The government, particularly the Project Monitoring Committee (PMC), which is jointly chaired by the secretaries-general of the Treasury and Defence Ministry, should report all progress publicly, just like how the Finance Ministry provides updates on the servicing of 1MDB debts. For a project and scandal of this scale, it is important to ensure that there are no more leakages and that the deadline is met.

The government cannot afford another round of delay and cost overruns. These ships involve national security.

On May 26, Boustead Heavy Industries Corp Bhd told Bursa Malaysia that Boustead Naval Shipyard Sdn Bhd (BNS) and the Defence Ministry had finalised negotiations for the sixth supplemental agreement for the project.

According to the update, the duration of the contract will be extended with the first vessel to be delivered, fully tested and trialled, in August 2026 – seven years later than originally scheduled – with the fifth vessel delivered in April 2029.

The total contract price has been revised to RM11.2bil from RM9bil following the approved change of specifications and extension of time, among others.

“The terms of payment is varied from milestone activity to progress of works reflecting the various elements in the contract based on weightage to the design, equipment, construction, trials and commissioning,” the filing read.

Meanwhile, the Finance Ministry’s special purpose vehicle will take over BNS.

This has been done in the past with other troubled firms and projects, such as the assets of Lembaga Tabung Haji in 2018.

Critics have also asked if those implicated in the audit reports will be investigated and brought to book if there have been wrongdoings.

The ships, and the anti-corruption narrative, played a huge part in the campaign for the 15th General Election.

Those cries during the campaign should be heeded now.

Given the change in political dynamics, there should be full transparency, with action taken without any fear or favour.

There should be no attempt at covering anything up.

However, questions have been raised about the anti-corruption stance of the current government.

Transparency International Malaysia raised an interesting point recently. “It was reported in January 2022 that MACC detained two senior executives in relation to the LCS project. Other than this, we have not heard of any action to address the various issues raised and bring those responsible to justice,” it said.

The LCS fiasco cannot be undone now, and the government has conceded that it has no choice but to continue with the project with RM6bil already spent.

The project was given a lifeline, but the damage to Malaysia’s reputation cannot be reversed.

Bailouts are expensive undertakings and the need for accountability and transparency is even greater now.

The 1MDB scandal is one the country is still paying for. We do not need more such scandals.

The progress reports must be delivered, and the ships must set sail on time. It’s a commitment the government must fulfil.