KUALA LUMPUR – The Public Accounts Committee (PAC) found that the implementation of the mobilisation plan for the littoral combat ship (LCS) project has not yet reached a significant level.
The finding was the result of a working visit of seven PAC members, together with Dewan Rakyat Speaker Tan Sri Johari Abdul, to the Boustead Naval Shipyard (BNS) on October 5 to review the progress of the LCS construction works.
According to a report published on the official PAC website, although the progress of the construction work has already started on the ground, there is a negative variance of 0.07%, or a delay of one month, in terms of the overall progress of the project from the original plan.
However, BNS and the Royal Malaysian Navy (RMN) gave assurances that the delay would not affect the overall timeline for the delivery of the ships to the navy.
“Based on the monitoring carried out by the Defence Ministry (Mindef), RMN and the Finance Ministry, PAC is of the view that it should be sufficient, and to be a catalyst for this LCS project to be completed on time.
“This is because there are four types of committees that monitor the progress of the LCS project in addition to the PAC, namely the technical committee at the project team level, and the project management review, which is the project’s technical team at the Mindef level,” said the report.
Apart from that, there is a working committee, chaired by Mindef’s deputy secretary-general for development, and the project monitoring committee, jointly chaired by the secretaries-general of Mindef and the Treasury.
PAC also concluded that the cost increase of RM2.098 billion for the project had taken into account a total saving of RM450 million, following the reduction of ships from six to five.
At the same time, PAC also found that the detailed design of the LCS is still at a rate of 96% completion at the construction contractor level, with only 84% having gone through the confirmation, verification and approval stage by France’s Naval Group, the LCS design authority.
“The confirmation work from France’s Naval Group is pending due to the payment arrears issue, which has not been fully resolved. In addition, the repayment of arrears to the original equipment manufacturer (OEM) will also be completed within six months after the sixth supplementary contract (SA6) is signed.
“For the purpose of improvement, PAC submitted five improvement recommendations, including that Mindef still needs to present a progress report on the LCS project every three months, until the LCS project is completed, including a progress report according to international project management standards.
“Mindef also needs to ensure that the construction contractor completes the detailed design, including getting approval from the Naval Group, before August 2024, as contained in SA6,” read the report.
The payments to be made to the OEM and the relevant parties should coincide with those outlined in SA6, to avoid construction delays.
The report also recommends that Mindef and the navy need to ensure that any funds are used prudently, by prioritising the need to complete the ships and not be wasteful.
PAC also proposed that the Finance Ministry plays a more proactive role in ensuring that there is no waste of public money in the LCS construction project.
A detailed report on the progress of the LCS project can be downloaded from the PAC website at https://www.parlimen.gov.my/pac.
Previously, the construction of the ships was embroiled in controversy when PAC revealed that not a single ship had been completed, even though the government had spent RM6.08 billion on BNS. – November 14, 2023