FORMER deputy prime minister Ahmad Zahid Hamidi said it was not right to blame him for the failure of littoral combat ships’ (LCS) procurement as he was not the defence minister when the project was awarded.

“Those who are involved need to give an explanation to the Public Accounts Committee (PAC),” he was quoted as saying by Umno online. 

Zahid, who was the defence minister from April 2009 to May 2013, said any party that caused the delay of the project should be responsible for providing an explanation to the PAC.

He added that the contract awarded to Boustead Naval Shipyard Sdn Bhd (BNS) is in accordance with the direct negotiation procurement application guidelines dated April 17, 2002.

“Clearly, it has nothing to do with me. Lembaga Tabung Angkatan Tentera itself is the largest shareholder in the company constructing the LCS,” he said.

The RM9 billion littoral combat ships project has been beleaguered with cost overruns and delays, without a single vessel delivered to date.

In a report, the PAC said the government’s due diligence on BNS had failed to detect the company’s financial weaknesses.

“As such, the government had to pay an upfront fee of RM1.36 billion to BNS, which is against government protocol,” PAC stated.

“BNS’ poor financials were caused by abuse of power and mismanagement. As of 2018, BNS owed the original equipment manufacturer (OEM) company RM801 million and another RM956 million to banks.”

According to PAC, BNS had appointed two other companies to procure equipment from the OEM company, resulting in cost overruns.

According to the original schedule, five ships should be ready and handed over to the Royal Malaysian Navy by this month. 

Yesterday, Malaysian Anti-Corruption Commission chief commissioner Azam Baki said the agency will soon reveal the findings on its investigation into the scandal.

Azam added that the investigation papers had been handed over to the Attorney-General’s Chambers.

“The investigations are in the final stages and the results will be announced soon. – August 7, 2022.