SHAH ALAM: IN the previous post on the nationalisation of Boustead Naval Shipyard (BNS), Malaysian Defence speculated that the cost of the project is now RM12.4 billion. This is because Ocean Sunshine Bhd (OSB) – the government owned company set up to take over BNS will be paying the BHIC and LTAT (the previous owner of BNS) some RM1.2 billion in liabilities and debt.
Defence Minister DSU Mohamad Hasan (who did not say that the project cost is now RM12.4 billion) told Parliament on Monday (September 19) that the cost of the project had gone higher due to the change of specification of key systems. From FMT:
In his winding-up speech, Mohamad also said the increase in budget was primarily due to changes in the specifications of key systems, namely the surface-to-surface missile system (SSM), decoy launching system (DLS), and integrated platform management system (IPMS).
“Despite reducing the number of ships to five, this cost increase was unavoidable as it represents non-recurring costs for the construction of the entire ship,” he said.
Do note that Malaysian Defence had already stated in the past that the cost of the project will go above the RM9.1 billion ceiling contract due to the changes to the items mentioned in bold, above. Malaysian Defence has also pointed out that the increase in cost had been pencilled in since 2017 but it was not fixed as the-then government thought it would do so after the 2018 general elections. Of course, that did not happened.
On May 26, BHIC and BNS announced that the cost of the project had went up to RM11.2 billion. As mentioned above with the payments for BHIC and LTAT, which need to be paid due to the nationalisation, the cost is now RM12.4 billion.
Do note that I am using the FMT story as the parliament official record – the Hansard – has not been published when this post goes live.
— Malaysian DefenceIf you like this post, buy me an espresso. Paypal Payment