SHAH ALAM: The Ministry of Finance, the Edge reported, has taken over the offshore patrol vessel project from the builder THHE Destini JV. Interestingly, the report also said that the project needed a loan of RM152.6 million from the government to complete the first vessel within this year (which is the real story, I believed). The MMEA first OPV was launched in October last year and currently is berthed at the THHE yard.
From The Edge:
KUALA LUMPUR (Jan 4): The Ministry of Finance (MOF) has taken over an offshore patrol vessel (OPV) project from THHE Destini Sdn Bhd, after discovering a number of “big issues” pertaining to the project, including the necessity of a RM152.6 million loan from the Government to ensure the completion and delivery of the first vessel within the year.
Following the delay in the project, Prime Minister Datuk Seri Anwar Ibrahim urged enforcement agencies to carry out their duties accordingly to ensure that nobody takes advantage of the public procurement process.
“[There’s] two actions. Firstly, we have to rescue [this project]. These OPVs have to be completed according to the schedule. Secondly, we should never let go of anyone who is responsible for abuse of power, [and made] a fortune out of this project,” he said at a press conference after the weekly Cabinet meeting.
THHE Destini secured the RM738.9 million job from the Government in January 2017 for the supply, delivery, testing and commissioning of three units of OPV fitting and accessories for the Malaysian Maritime Enforcement Agency over a period of 42 months.
THHE Destini was 51%-owned by Destini Bhd, and 49%-owned by TH Heavy Engineering Bhd.
However, TH Heavy acquired the 51% stake in THHE Destini from Destini for RM121,131.12 towards the end of 2021.
TH Heavy was delisted from Bursa Malaysia in September last year, after the group failed to submit a regularisation plan to exit its financial distress.
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The report did not mention it but as reported previously, TH Heavy Engineering (THHE) now comes under Urus Harta Jemaah, an investment holding and asset management company wholly-owned by the Minister of Finance (Incorporated). This was done by PH government after the May 2018 general election. Urus Harta Jemaah remained the owner of THHE until now. THHE now completely owned the JV as it had purchased the stake from Destini previously.
Anyhow with the RM152.6 million loan, that it is likely the cost over-run of the original contract of RM738.9 million. This is some 10 per cent cost over original contract, I believed. Hopefully, the statement that the loan was needed to finish the first ship is wrong, and the figure also covered the two other ships as well. I have been told that the RM152.6 million loan will need to be paid to the government, so it meant that there is no cost over-run (technically). The amount is enough to complete all the three ships in the contract.
* new headline and further information to clarify the real story
— Malaysian Defence