SHAH ALAM: All is well. Despite the confidence of the Defence Minister DSU Mohamad Hasan that the first LCS – Maharaja Lela – will be ready by late 2024, there are indications that it will not. The indications came from Mohamad himself, when he spoke to the media on January 9 at the Lumut naval base. As Malaysian Defence was not invited to the PC, we must rely on the recording of the media conference.
Most of what he said had been widely reported but the indication that his confidence was not justified, did not came through in the news reports. For example, Mohamad stated that the government had paid out some RM6 billion out of the RM9 billion ceiling price, leaving some RM3 billion still left over (likely in government coffers). This is not new of course, the Public Accounts Committee (PAC) hearings had confirmed this, and this has been subsequently confirmed by the two previous ministers. In fact, Mohamad’s predecessor DS Hishammuddin Hussein had stated that the LCS vendors were owed some RM4 billion.
But the fact that the government is still holding on to some RM3 billion, means that Boustead Naval Shipyard (BNS) and its vendors have not been paid as according to the minister, negotiations have not been completed, yet. When asked whether they had terminated contracts with the project’s “middlemen”, Mohamad said the negotiations with the vendor (likely Contraves) was still ongoing. He said they were confident that it will be resolved.
Mohamad also said once all the negotiations were over, he will submit a paper to the Cabinet for final approval. He did not reveal when this will occur, but it is likely it will only happen by the middle of the year, some 15-months before PCU Maharaja Lela is to be completed. Which is again very tight especially when Mohamad himself stated that the BNS had only finished 85 per cent of ship’s drawing but only 65 per cent had been approved by Naval Group.
Do note that figures stated by Mohamad was the same one revealed during the PAC hearings so this means that there is no progress had been achieved in this regard for the last three years. Which is understandable as BNS has no money to pay Naval Group. Malaysian Defence has previously posted that the main issue of the LCS project is money or rather the lack of it. The technical issues are surmountable but if only money is available.
In conclusion, all the indication is that the LCS will not be ready by 2024 or even 2025 despite what was stated by the Defence Minister. Again, I am not revelling in the fact that the LCS project remains a big stinker. I wish it will be ready tomorrow but alas all indications that it will not. I will be very happy if I am corrected of course.
— Malaysian Defenmce