Parliament’s PAC aims to present report on non-delivery of warships during March sitting

PAC chairman Wong Kah Woh said that it views seriously the failure of the Defence Ministry to supply six second-generation LCS warships to the Royal Malaysian Navy involving RM9 billion — the largest acquisition in the history of the ministry. — Picture by Mukhriz Hazim
PAC chairman Wong Kah Woh said that it views seriously the failure of the Defence Ministry to supply six second-generation LCS warships to the Royal Malaysian Navy involving RM9 billion — the largest acquisition in the history of the ministry. — Picture by Mukhriz Hazim

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KUALA LUMPUR, Dec 17 — Parliament’s Public Accounts Committee (PAC) today said that it intends to complete and present the report on the controversies surrounding the littoral combat ship (LCS) project during the March Parliament sitting next year. 

Its chairman Wong Kah Woh in a statement today said that PAC views seriously the failure of the Defence Ministry to supply six second-generation LCS warships to the Royal Malaysian Navy involving RM9 billion — the largest acquisition in the history of the ministry. 

The project, worth more than RM9 billion, was awarded in 2014 and the order was for the six warships to be constructed. The first ship should have been delivered in April 2019, but not one ship has been built although the government has paid the company RM6 billion.

“The appointment of the main contractor, Boustead Naval Shipyard (BNS) Sdn Bhd, was done through direct negotiations. As of October 2020, RM6.083 billion has been paid and not a single LCS ship has been delivered, even though according to the schedule two LCS ships should have been completed by now. 

“This issue was reported in the Auditor-General’s Report (LKAN) 2019 Series 1 (Compliance Audit of Ministries/Federal Departments) as well as in the Governance, Procurement, and Finance Investigation Committee (JKSTUPKK)’s report,” he said. 

Wong said the failure to deliver the LCS ships is deemed serious because it not only involves failures in terms of governance, procurement and finance, but also has an impact on national security and defence.

“Following this, PAC called for a proceeding, and to date, four meetings and proceedings with witnesses have been held. 

“From November 5 to December 16, Auditor-General Datuk Nik Azman Nik Abdul Majid, Defence Ministry secretary-general Datuk Seri Muez Abd Aziz, and JKSTUPKK chairman Tan Sri Ambrin Buang, who is also the former auditor-general, were among many others who had attended the proceedings,” he said. 

Wong said PAC is of the opinion that a solution should be decided by the government as soon as possible.

“It is therefore important for PAC to expedite the proceedings of this issue and present its report to the Dewan Rakyat.

“The proceedings on LCS issue will continue early January next year by calling more witnesses, which will include former defence minister Datuk Seri Ahmad Zahid Hamidi, former Malaysian Navy chief Tan Sri Abdul Aziz Jaafar and representatives from BNS Sdn Bhd, as the main contractor for the LCS warships,” he said. 

Wong said PAC will also visit the LCS shipbuilding site in Lumut, Perak in January 2021.

In October, former deputy defence minister Liew Chin Tong urged the government to investigate the missing RM1 billion linked to six warships that were ordered by the Navy.

Liew said the missing funds were a serious matter and should be returned so that the LCS project could be completed.

He said once the parties involved are brought to justice, the government should consider injecting funds to ensure the project can be completed for the Navy’s use, to continue protecting the sovereignty of our waters.

Liew told the Dewan Negara in September that Putrajaya’s special investigation committee on procurement, governance and finance, had discovered that RM1 billion of the RM5.94 billion paid for the warships could not be traced.

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