THE construction of five littoral combat ships (LCSs) is expected to be completed in 2029, as opposed to the promised delivery in 2022 contained in the original contract.

The Public Accounts Committee (PAC) report said the LCS construction period has been extended to 83 months.

It said the Defence Ministry (Mindef) needs to ensure the implementation of the mobilisation plan is in accordance with the conditions that have been set with the first LCS to be completed in May 2024 and handed over to the Royal Malaysian Navy in August 2026.

“Mindef and RMN are responsible for ensuring that the entire construction project of five LCS worth RM11.22 billion is completed and handed over to the navy according to the agreed period and cost in SA 6 (the Sixth Supplemental Agreement),” it said.

The report also revealed that the main issue of the LCS’ detailed design, which is 96% complete, has not been resolved, with only 84% having gone through the confirmation, verification and approval stage by LCS design supervisor Naval Group from France.

As such, the PAC recommended that Mindef ensure the contractor completes the detailed design, including obtaining approval from the Naval Group, before August 2024, as stated in SA 6.

“Ministries and government agencies must ensure that the draft contract negotiated with the company has been consulted, reviewed, and approved by the Attorney-General’s Chambers (AGC) first before signing it.

“The SA 6 signed on May 26, did not receive AGC approval, and Mindef has been notified that additional action is required before the consent document can be returned to the AGC before it is signed.

“Mindef’s decision to turn its back on the AGC in signing SA 6 is inappropriate, and it could have legal implications for the government. It must not be repeated,” the PAC said.

On the government’s decision to take over Boustead Naval Shipyard Sdn Bhd through Ocean Sunshine Bhd, PAC believes it can help restore the confidence of shareholders, banks and suppliers in the implementation of the LCS construction project.

The report also recommended that the Auditor-General’s Department conduct an audit before LCS 1 is handed over to the RMN, and subsequently table the report in parliament.

The government previously decided to reduce the number of LCSs from six to five due to the fact that the construction of LCS block 6 has not yet started, with the total cost of the construction of the five ships being RM11.22 billion, an increase of RM2.1 billion. – Bernama, October 9, 2023.