Mindef Signs Additional LCS Contract With BNS, Updated

Mindef Secretary General DS Muez Abdul Aziz and LTAT CEO Ahmad Nazim exchanging the contract documents. It is unclear why the LTAT CEO signed on behalf of BNS. Mindef

SHAH ALAM: The Defence Ministry has signed the fifth additional (supplementary) contract for the LCS with Boustead Naval Shipyard (BNS) to allow the resumption of the project as announced previously. As usual there was no further details on the additional contract nor when the project will resume.

An eagle eye view of the BNS facilities in Lumut. Note the hangars at the end which was built specifically for the LCS using the funds of the project, Behind the first LCS, is likely KD Kasturi undergoing a refit since late 2021. BNS

The additional contract was signed at Jalan Padang Tembak on May 31, according to a statement issued by the ministry. Defence Ministry secretary general DS Muez Abd Aziz and LTAT CEO Ahmad Nazim Abd Rahman.
The most recent picture of LCS PCU Maharaja Lela taken in November 2021. BNS via LinkedIn.

The release:

31 Mei 2022, Kuala Lumpur – Ketua Setiausaha Kementerian Pertahanan, YBhg. Dato’ Sri Muez Abd Aziz mewakili Kementerian Pertahanan telah menandatangani kontrak tambahan ke 5 bagi Kontrak Perolehan Littoral Combat Ship (LCS) antara Kementerian Pertahanan Malaysia dan Boustead Naval Shipyard Sdn Bhd (BNSSB).
Dengan termeterainya kontrak ini, akan membolehkan BNSSB memulakan fasa mobilisasi selaras dengan keputusan Jemaah Menteri untuk meneruskan projek LCS.

The LCS major equipment detailed. RMN graphic

I assumed at least the additional contract was to replace the earlier ones especially in regard to the the new deadline for the delivery of the ships, with likely the first in 2025 (as announced before) with the rest of them due a year after the other. It may not include the variation orders (VO) that were due before May 2018. The last supplementary contract was for the first ship to be delivered in 2019, instead of the original deadline of 2017
A CGI of the LCS.

This was the reason the project had to be stopped in November 2019, as BNS had run out of money. It ran out of money as it had missed the deadline for the delivery of the first ship and the government cannot pay the shipyard any further. Apart from the money, much of the work cannot proceed further as the VO had not been signed.
*updated to clarify that this was fifth additional contract of the LCS as mentioned in the comments section. I apologize for the mistake.

— Malaysian Defence

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11 Comments

  1. The writers malay comprehension needs to be improved as the whole article is based on that wrong comprehension.

    “kontrak tambahan ke 5” means this is the 5th additional contract signed, not as the writer say 5 additional contracts.

    Basically a VO to say yes to the now further delayed timelines. If no VO, all the deadlines of the original project cannot be achieved anymore.

  2. I don’t think “kontrak tambahan ke 5” means 5 additional contracts.

    I think it means that this is the fifth supplementary contract i.e. this is the fifth time that the original contract has been amended.

    Whenever there is an amendment to a government contract, you need to sign a supplementary contract.

  3. And again we bowed down to the oft-repeated argument that we need to look after the rice bowls of 400 vendors and their employees. Well and good. What about NOT giving further tenders to BNS (and LTAT subsidiaries) for a change with the much talked about 2nd Batch LMS? There are other erstwhile shipbuilders in Malaysia that can be made responsible for delivering this new project. If I say more, I’d be accused of promoting the capabilities of shipbuilders in Sabah, Labuan and Sarawak.

  4. I am curious though, what about the 2nd batch of 6 frigates? Does the government still have enough money and will to purchase 6 more as per the 15 to 5 plan where they intend to get 12 frigates? Or will the navy have to settle for just 6 and beef up the fleet with the batch 2 lms ships

  5. Taib – . If I say more, I’d be accused of promoting the capabilities of shipbuilders in Sabah, Labuan and Sarawak”

    Ships can be constructed in the Cayman Islands, Cuba or Algeria for all we care as long as they are delivered on time; on spec and within budget.

    As for BNS it’s not as simple as saying it should not be awarded any contracts and this is from someone who believes the needs of the taxpayer and end user shout come first over the local industry. As it stands BNS is the largest purpose built naval facility in the country and is located within the naval base: if it goes down who will take over? What effects will it have on the RMN? Another factor is whether BNS shares the whole blame for the cockup? Who decided on the scope of the programme and the schedules? Who was in charge of oversight and ensuring that all the risks were factored on and minimised? If BNS only performs refits [as originally intended] can it sustain itself?

    Jason,

    Priority is on the LMS Batch 2s and completing the LCSs;follow on LCSs are a long long time away. As for the 5/15 if you look at previous discussions its’s as good as dead and never really had a chance of being implemented.

  6. “memulakan fasa mobilisasi selaras dengan keputusan Jemaah Menteri”
    So meaning the decision has been made on the plan moving forward but nobody has question that decision or the lack of transparency what does it entails? Why our Opposition MPs so silent in demanding for details on the restart and how much would it cost taxpayers, I thought they would gladly hound on this at least.

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