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.
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.
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.
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?
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.
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.
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