On The Road Again, LCS

BNS workers posed for pictures with Maharaja Lela at her launch in August, 2017 The workers are under strict order not to share the pictures of the ship during the construction.

SHAH ALAM: On the road again, LCS. The government has approved the restart of the RMN’s Littoral Combat Ship (LCS) project by Boustead Naval Shipyard (BNS), which had stopped since 2019. The approval was made by the Cabinet on May 5, says the Defence Ministry in a press release issued today.

The ministry said the approval was subject to conditions imposed on BNS though it did not specified the conditions imposed on the company nor any timelines on the completion of the project or any increases in cost.

A CGI of the LCS.

The release

KENYATAAN AKHBAR MENTERI KANAN PERTAHANAN
PEROLEHAN LITTORAL COMBAT SHIP (PROJEK LCS) DITERUSKAN UNTUK MEMPERKUKUHKAN KESELAMATAN PERAIRAN NEGARA DAN MENDOKONG
INDUSTRI PERTAHANAN NEGARA
Merujuk kepada isu perolehan Littoral Combat Ship (Projek LCS), pihak Kementerian Pertahanan ingin mengumumkan bahawa Mesyuarat Jemaah Menteri yang bersidang pada 5 Mei 2021 telah bersetuju untuk Kumpulan Boustead meneruskan pembinaan LCS yang telahpun terhenti pembinaannya sejak tahun 2019.
Menyuarat Jemaah Menteri juga telah menetapkan beberapa syarat yang perlu dipatuhi oleh Kumpulan Boustead.
Dengan penerusan pembinaan tersebut oleh Kumpulan Boustead, ianya akan menyelamatkan 1,600 orang pekerja yang terdiri daripada anakanak tempatan dan juga lebih daripada 400 syarikat vendor yang terdiri daripada PKS Bumiputera.
Sekiranya pembinaan LCS ini tidak diteruskan ia akan memberi beberapa impak negatif kepada para pekerja dan vendor Bumiputera yang terlibat.
Ia juga akan memberi kesan kepada Lembaga Tabung Angkatan Tentera (LTAT) yang merupakan pemegang saham di dalam Boustead Holdings
Berhad. Selain itu, secara tidak langsung pencarum yang merupakan anggota tentera akan menerima kesan sekiranya projek ini tidak diteruskan malah pihak bank yang memberi pinjaman kepada projek ini juga bakal kerugian
kerana Boustead Naval Shipyard tidak berkeupayaan membayar pinjaman.

Untuk rekod, Kumpulan Boustead Naval Shipyard adalah merupakan sebuah syarikat milik kerajaan yang diusahakan oleh majoritinya anakanak Melayu Bumiputera.

YB DATUK SERI ISMAIL SABRI YAAKOB
MENTERI KANAN Pertahanan
7 Mei 2021

Another angle of the keel of the first LCS, most likely from the bow end when Hishammudin Hussein launched the first keel in 2016. H20 picture

It interesting to note the release did not mentioned anything on RMN apart from the headline which says that it is meant to strengthen the maritime security of the country, which basically summed up how the politicians feels about the defence. Any how from previous reports, we know the project is likely to cost more than the RM9 billion ceiling when the contract was signed seven years ago. The deal was awarded to BNS in 2011 though. How much will it cost then to have six LCS and when all ships are commissioned? Your guess is good as mine!

The first LCS during her keel laying ceremony in March 8, 2016. Bernama picture

For context please read my previous posts on the LCS


— Malaysian Defence

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About Marhalim Abas 1479 Articles
Shah Alam

36 Comments

  1. Managing problem… ok because a lot vendors n worker, so no choice to keep u all alive. The cycles will never End. Until now, i still prefer option to get DCN involve n conditions is rehire all these worker only…. maybe cost will high but i can get a guarantee, it will Deliver! Anyway, no use to give comments because nasi already become bubur. Just pray we can get it on time and the ship is deliver as per the specs.

  2. Enough is enough. Let this be the last n final time a contract to build new ships be given to Boustead. In future , tenders should be on an open basis to all qualified Malaysian shipyards n not to a GLC anymore.
    Better still , just buy direct overseas as its for national security n interest.

  3. My wild guess, govt will add more monies until 1 LCS cost us at least RM2 billion, using year 2021 exchange rate.

  4. Good: I’m rejoicing that the LCS project is now underway. Our navy can finally get the modern frigates they truly deserve. Almost all our SEA neighbors are moving ahead of us. It’s time to catch up.

    Bad: I dread to know how much more $$$ we need to spend and be lost to waste & corruption.

  5. Marhalim,
    “It interesting to note the release did not mentioned anything on RMN apart from the headline…”
    For politicians, important thing is,
    1600 workers and families member vote.
    400 vendors and families vote.
    LTAT members and families vote.
    TLDM assets do not vote. 😅
    Election around the corner maybe? 🤔

    Still am glad the LCS project is moving again.

  6. @Steven Chong
    Is it waste & corruption which stalled the project or due to budget constraints when the true cost was hidden? I am for the latter, and you would too once you understand Marhalim’s cryptic comments in past articles.

    One thing’s for sure, these delays and stalls have definitely up the real cost even further.

  7. Surely not another gun ship like the kedahs again aite? For sure the overall project cost will increase absurdly maybe as much as 10 to 12 billion but as long as they can deliver all 6 ships without another hiccup then they can proceed..But in no circumstances they should get another contract from the govt..Last hurrah for them

  8. I agree that maybe in future, purchasing directly from the original supplier is a better option to minimize major ‘hiccups like this as we’ve seen too many times, especially for combat ships, these troubles occur when it involves local vendors & entities… I’m sure entitled payments do not make it to their original destinations, therefore delays and ‘financial problems’ occur for these types of projects…

  9. Good…bad decision is better then no decision at all.
    The big question is how many ship decided to be built? Is it only 2 ships or all 6 ships?
    Extra RM3 B is only for 2 ships.

  10. @Firdaus
    Unlikely. Most of the weapons and sensors have been bought, only the VL MICA wasn\’t purchase yet.

    @Romeo
    RM6 Bil was used up to date.
    Another RM 3 Bil from budgeted (ttl 9 Bil) is sufficient for 2 ships.
    It seems BNS request for yet another RM 3 Bil (ttl 12 Bil) for them to confidently complete all 6 ships.
    Final sum could total RM 13Bil for the 6 units.

  11. carry on with the project must be, ensure all 6 are completed and delivered asap without further delay. Am sure lcs 1 n lcs 2 need a bit more installation and integration before they can be delivered to the navy. 3 & 4 might follow suit shortly after. while 5 & 6 can be constructed right after 1 & 2 delivered.
    In mean time the gomen & navy should start looking for a more reliable and competent shipyard in the country to build no.7 to no.12. So that bns could be allowed to continue to survive with 12 additional ngpv (better come fully fitted for and equipped with this time around) and another 14 lms fully loaded with the specific mission containers.
    Let other ships and boats manufacturers concentrate on building the ngpc/opv/mrss/combat boats/fic to build a strong maritime defence forces for the country.

  12. By human nature people like to speculate and there’s been a lot of speculation but the fact remains we don’t really know what went wrong. Was it due to poor planning and incompetence? The inability of the yard? Corruption? A combination of various factors? Does the government share a party of the Biden? We don’t know yet ….

    All we know at this juncture is that – yet again – the armed services and taxpayer will have to incur the penalties …. For the sake of public interest and accountability they should publicly make known the reasons which led to this very major cock up.

    We also have to ensure that something like this doesn’t reoccur and acknowledge the fact that the whole defence policy (the so call “self sufficiency” delusion and the part played by local companies) is in need of a major revamp ….. There also has to be the will and intent to learn from our mistakes.

  13. Muzaffar – “I agree that maybe in future, purchasing directly from the original supplier is a better option”

    It’s due to our policy ….

    We want “self sufficiency”, to create jobs, build up the local industry, etc. That’s why the LCSs were constructed here. Same with the Kedahs, AUGs, M-4s and AV8s. Same reason why some local companies get to dictate things and get paid for being a middleman but offering no added value (the Little Bird and Korean training ship fiascos are good examples).

    On paper local construction and buying IP rights works but only for some. For us it doesn’t – we have no economic of scale; a Alice In Wonderland Cloud Cuckoo Land policy (yet some still buy the “self sufficiency” delusion) and defence is not a priority.

    Ed – “Still am glad the LCS project is moving again.”

    Yes but at what cost and do they really meet our short to long term operational needs? Is the actual design (not much deck and below deck space for future upgrades) and is the sensor/weapons really what we need for the threats we expect to face?

    It’s 2021 but the RMN still remains a largely platform centric service. We aren’t even seriously looking at UUVs and USVs to supplement manned assets and the only reason the RMN has UASs is thanks to the American taxpayer.

  14. It is a long and winding road for TLDM
    to get its best fleet of surface combatant sor far.

    Alas, better late than never.

  15. The max per unit price i can fathom for our lcs is between 1.5 to 1.8b..Anything more than that will only make our lcs one of the most expensive light frigate in the world..But maybe could touch 2b per unit..who knows..i take that provided that ships comes will full suites of radars sensors and armaments intended for them

  16. If not mistaken, BNS lodged a report with MACC that RM1 billion for the LCS project went missing. Any news about this?

    Reply
    Nothing have come out of this. The Auditor General has not found anything on this claim

  17. ZekMR – “Alas, better late than never”

    You think so?

    What if those ships simply don’t provide the needed capability? Will the “better late than never” cliche still apply?

  18. @Firdaus
    As it is now, its already too expensive. RSN Formidable class in a similar comparison, is estimated to be $300-400mil (tops at RM 1.6Bil) and it is a far more deadly vessel! No national project has ever got our money’s worth but it is what it is.

    So should we still build ships & subs locally? Yes, we can as long its to a standard spec from OEM whereby the progress is more predictable and linear ie MMEA NGPC & OPV ships. So far there is lesser hiccups with those builds, right? If we wanna customised, ie LCS, better do it at OEM yard initially at least.

    Large projects with long build time involving hundreds or Ks of people such as these still have knock on effect so maximising local efforts has benefits, but others, ie only 18 units LG1 local CKD, involves just a small group of people and which only takes 1 year to complete has no benefits whatsoever.

  19. Like it or not we the taxpayers have to pay for all these discrepancies & a clear cut project mismanagement. I hope Boustead board of directors will be changed and do a total overhaul of future gov procurement in military. Persoalannya, adakah frigat ini juga akan ompong seperti kes nya PSC Naval Dockyard Kedah class? All evident shows that no VL Mica procurement has been made by the gov to date 🥴

  20. We are Malaysian, bumiputra and none bumiputra should work together to settled this project… We hav a lot off shipyard whole over the country capable to finish this project…gov should change this policy, bumiputra and bumiputra work together..

  21. Azlan,
    “Yes but at what cost…”
    I wouldn’t know how much it’ll be but how often the government ever bought anything that’s not over price. I would be happy to see those LCS get completed than having RM6 billion rust away. 😅
    “…and do they really meet our short to long term operational needs?”
    Kind of late for this to be question as the government and RMN have long committed to “mini frigate” built. Unless you have a solution for the Navy? 🤔

  22. Enough with the yes no and yes game. What i want to know is the numbers. When will the 1st ship be commisioned? When will the govt secure the VL MICA system and much delayed subsystems from the US? Delays in securing GFEs will also delay the construction. We have made a decision. Time to go to work.

  23. This is all politics. I bet the program would still on track if BN had won the 2018 pru.

    But when the PH wins…hmmm. re-evaluation… audit… who-is-who in the project…extra money approval…etc

  24. Hazone,

    My questions are different …

    – If we find that the LCS doesn’t meet our long term needs; can follow batches be slightly lengthened/enlarged?
    – Are there any plans for a follow batch? If not; the whole exercise of building them locally and acquiring the IP rights will be another colossal waste of financial resources.
    – Will the RMN in due course be able to acquire the other assets needed to supplement the LCSs; namely the LMS, ASW configured helos, UASs, UUVs and USVs? The LCSs are not intended to work alone; certainly not in this age of connectivity and network centricness.

    Muzz – “This is all politics”

    This is all due to our highly flawed, self defeating and delusional defence policy. This holds true regardless whether PN or PKR are the Putra Jaya occupants. The rot started when BN was in power (decisions made by Dr.M) and it carried on. It became deeply ingrained as part of the system.

    By the same token during the short time PKR was in power; it didn’t do anything significant to revamp the defence policy. I may not be a fan of his party but the former Deputy Defence Minister was the only one who said anything significant and pertinent when he spoke of the need to have a relook at our defence policy; including the role local vendors and companies play …

  25. Ed – “I wouldn’t know how much it’ll be but”

    I was also referring to the fact that extra cash spent salvaging the LCSs might have an impact on other areas. Which is what I meant when I pointed out a long time ago that delays in the LCSs will have wide and long term implications which go beyond the RMN getting them late.

  26. @Muzz
    It would be on track because BN, for certain reasons it would seem, had underbudgeted the LCS project in hopes to later silently issue a supplementary budget to top up the shortfall. With insufficient money, no way could BNS complete all 6 vessels.

    RM 6Bil is used up for 52% progress. A layman would say it needs another RM 6Bil to complete the project – or RM 3Bil in excess of the project budget.

  27. Azlan,

    “I may not be a fan of his party but the former Deputy Defence Minister was the only one who said anything significant and pertinent when he spoke of the need to have a relook at our defence policy; including the role local vendors and companies play …”

    Agree on this. Compared to the blithering id… that headed the ministry at that time, he seemed to be in tune with flaws of the current system and raised some pertinent points about it. Had it been someone else being the minister there could have some change. Another thing too, Mahathir could’ve appointed a general to the position of Minister of Defence (like the current MoF), but again he decided to play politics.

  28. ASM – “ahathir could’ve appointed a general to the position of Minister of Defence”

    Thus should never happen. Under our systems ex Generals should never been given positions in the government simply because they are ex Generals and even if there was a ex General as Minister of Defence; there’s absolutely nothing to say that things should gave been handled more efficiently or faster.

    No single individual can change the system….. If only it were as simple as that. It takes a long term collective effort with the needed political will and intent …
    We have to want to truly change things and to learn from our mistakes ….

  29. ASM – “but again he decided to play politics.”

    Of course he’s going “to play politics” he’s a politician …. Politics is about gaining power; then holding on to it. The ness we are in because of the “self sufficiency” delusion; appointing local companies as middlemen; local production; offsets and ToTs are all politically driven.

  30. @ASM
    Talk but no action is just tin kosong making noise, in the end what did they had to show for the 22 months in charge other than delaying LCS progress? Ok, I give, maybe it is the new procurement procedure of everything going thru open tenders now but again there were regular folks here whom disparage that!

    So whatever action/inaction would never please everyone, but if they were aware about such issues and still not taken any action to mitigate it….. in the private sector that’s considered a failure of Top Management.

  31. Hi sad to hear about the LCS saga…like i said in the past post by the time TLDM recieve its first LCS that will be the day most of its electronics are considered obselete and need to be upgraded.
    The intense fighting in the GAZA STRIP proves astross MLRS is relevant but in large numbers,Even the iron dome is unable to stop hundreds of blind rockets from doing damages….do HAMAS have sophisticated network centric system ? I doubt so but it still does damage,whilst the jewish have mobilzed 100+ jets and merkava for counter attack.
    Same goes for their oil n gas platform offshore…. frigates proves ineffective and expensive against kamikaze UAV n rockets bombardments….
    Thus FAC size ship are better off in combatting kamikaze UAVs…these ship just needed the right electronics inorder to defeat these UAVs….like radio n digital jammers installed…rapid guns to do killing of UAVs n rockets…
    Hopefully GAZA SRTIP episode will give new breath to ATM MLRS systems and more modern FAC for TLDM….sopfisticated network system is good but does it prove its worth…?

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