The government had spent RM6 billion on the Littoral Combat Ship (LCS) project but not even a single ship has been completed, says the Parliament’s Public Accounts Committee (PAC).
This is among the findings from the bi-partisan committee’s 250-page report which was tabled in Dewan Rakyat on Thursday (4 August).
According to The Star, PAC chairman Wong Kah Woh said payments made by the government to Boustead Naval Shipyard Sdn Bhd (BNS) were not fully utilised for the LCS project.
He said a witness testified that RM400mil was used to repay previous debts incurred under the New Generation Patrol Vessel (NGPV) project.
“Another RM305mil was used for an integration facility in Cyberjaya while another RM700mil was cost over run which was above the ceiling which had been agreed under the LCS contract,” he added.
Wong said the the 2-year probe by PAC found that the RM9bil project was done through direct negotiations with BNS and inked in 2014.
Up to date, the government had paid out RM6 billion for the project, but not even one ship has been completed. “Based on the original schedule, five ships should have been completed and delivered by August 2022,” he said.
The PAC also found that 63.8% was paid for completed work for the first ship although only 42.7% of work was done.
Apart from that, the probe found that about RM255mil or 15% out of some RM1.7bil worth of LCS equipment kept in stores for the project is now obsolete.
At the same time, the report revealed that BNS’s financial standing was critical and weak as one of the reasons resulting in abuse of power and discrepancies in the company’s financial management.
“As of 2018, BNS debts to original equipment manufacturers (OEM) amounted to RM801 mil while the company owes RM956 mil to financial institutions,” added Wong.
Thus, Wong suspected that there could be corruption involved and called on the relevant authorities to take action on the matter.
“We can’t wait any longer anymore, this is the largest single procurement by the Defence Ministry in history.”
“As such, for the first time, the PAC will require the ministry to report back on the work progress every three months till the LCS is finally completed,” he added.