Delays to the MMEA OPV

SHAH ALAM: Delays to the MMEA OPV. Destini Bhd which had divested itself from the MMEA OPV project in April this year has in its 2020 annual report explained what happened to the project. The company said the Covid 19 pandemic was partly responsible for the delays. Destini sold its part of the THHE/Destini JV to its partner THHE.

The first MMEA OPV at her slipway at the THHE Fabricators yard in Pulau Indah in November 2020.

What the report says:

Destini’s marine division recorded a decline in revenue of RM86.85 million in FY2020 from RM172.84 million a year before
which resulted in a LATNCI of RM101.19 million from a LATNCI of RM66.12 million in FY2019.
• Destini’smarinedivision is the highest contributor to the Group’s revenue from its shipbuilding projects despite a slowdown in project execution during the year which was due to restrictions from the pandemic.
The fabrication of three Offshore Patrol Vessels (“OPV”) saw a delay from not being able to receive construction materials on time. About 70% of the ship’s construction materials are sourced overseas and most of the items are shipped from China which went through a total lockdown in early 2020. The inability to secure construction materials due to the lockdown disrupted the timing of the project delivery.
• Seeing the delays in project execution, Destini requested for an extension of time and the Government had in November 17, 2020 approved an extension of time for the supply, delivery, testing and commissioning of the OPV’s for the Malaysian Maritime Enforcement Agency (“MMEA”) with effect from August 23, 2020 to August 22, 2022. As at December 2020, the
OPV project is 74% complete.
• However, despite these turbulences, Destini was still able to deliver three airboats and two New Generation Patrol Craft’s (“NGPC”) for the MMEA.

OPV1 on the slipway ready for joining back in 2019. Via source

It is interesting to note that 70 per cent of the materials for the OPV is sourced from overseas and most of it come from China – most likely the steel or aluminium used to build the ships. It is just goes to show that despite what the politicians tell us that local production of military/security agency equipment benefits the local economy, most often than not especially for the high end ones, it does not.
OPV 1 at the slipway for the joining work. Based on the pictures, the ship is build on three large modules. via source.

Yes it will offer employment to locals during the construction/manufacturing but after the five year period what then? And at what cost of those the local manufacturing does to the military/security agency budget?
KM Kota Kinabalu (right) and KM Tok Bali. Note the empty deck behind the 30mm RWS. These boats will not be equipped with the Thales Fulmar UAV.

It must be noted that even though Destini had divested from the MMEA OPV project, its marine division remained intact and it can still bid for other projects locally or overseas including the LMS Batch II project.
KM Kota Kinabalu (right) and KM Tok Bali seen at Destini shipyard in July 2020. Note the empty deck behind the 30mm RWS. These boats will not be equipped with the Thales Fulmar UAV.

The report cited also noted that it had delivered three airboats and two NGPCs to the MMEA. The airboats were handed over in February, 2020 while the NGPC – KM Kota Kinabalu and KM Tok Bali it was in July. I have no idea where is the sixth NGPC, KM Lahad Datu is supposed to be, though I am told the ship has been completed.
One of three airboats build by Destination Marine Services Sdn Bhd, a subsidiary of Destini Bhd. Three of these airboats were delivered to MMEA in February, 2020 without much fanfare. APMM picture

— Malaysian Defence

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