OPV1 Handing Over Delayed, OPV2 and 3 Never?

OPV1 - PCU Tun Fatimah - after her launch on October 10, 2022. APMM

SHAH ALAM: Back in August, Malaysian Defence reported that the MMEA’s OPV1 – OPV Tun Fatimah – will be delivered by year end. This was even though the plan was for her to be delivered by October or November. MMEA DG Admiral Maritime Abdul Hamid Amin speaking on November 11 announced that the handing over will take place on November 27.

Unfortunately, I was told that this was not the case as the handing over ceremony today was scrubbed after OPV1 suffered a glitch last week.

Home Minister DS Shaifuddin Nasution making a point as he visited the bridge of MMEA OPV1 in January, this year. KDN

The matter was rectified quickly, I was told, but it was enough for the handing over to be delayed to mid-December. For the record, OPV1 was on contract to be delivered in August 2022. Checks on ship trackers today showed Tun Fatimah remained at the TH Heavy Engineering (THHE) jetty adjacent to the shipyard. She was on trials within the last two months.

Anyhow, what about OPV 2 and OPV 3 then? I was told that their completion and deliveries are in limbo as THHE has been wound up. From the Edge:

KUALA LUMPUR (Sept 13): Offshore fabricator and shipbuilder TH Heavy Engineering Bhd (THHE) is undertaking a voluntary winding-up, a year after it was delisted from Bursa Malaysia.

The company resolved to undertake voluntary winding-up as it is unable to continue its operations due to liabilities, it said in a winding-up notice dated Sept 13.

The winding-up notice also stated that a meeting of creditors is scheduled for Oct 4 at 3pm.

THHE is controlled by the Ministry of Finance-owned (MoF) unit Urusharta Jamaah Sdn Bhd, which holds a 64.45% stake in the company prior to its delisting on Sept 5, 2022.

As of March 23, 2022, other shareholders include Mohamed Faroz Mohamed Jakel and siblings Luqman and Mohamed Nizam who collectively held 2.95%, according to THHE’s last annual report.

As at end-June 2022, THHE had capital deficiency of RM210.87 million, as it had RM393.14 million in total liabilities, against RM182.27 million in total assets.

This was the same scenario which befell the RMN training ships back in 2015. Both ships were finally completed at the Grade One Marine Shipyard in Lumut, Perak and commissioned into the RMN in 2018.

It must be noted that both KD Teguh Samudera and KD Gagah Samudera had already been launched when the shipyard was wound-up by its creditors. I was told OPV2 and OPV3 blocks have been built but they are not yet joint. (I was told of recent pictures of the OPV 2 and OPV3 under construction at the THHE shipyard but they looked the same as when I saw them in 2019).

I was told the Home Ministry and Urus Harta Jemaah (the MOF-owned company which took over THHE during the PH government rule) were trying to ensure that the OPV2 and OPV 3 could be completed. But it will take some time based on the training ships saga. Hopefully, Urus Harta had ring fenced OPV2 and OPV3 when it voluntarily wound-up THHE so there is no need for them to get a court order to do it (which will take time).

Even if they got the legal order to complete the ships, it is unclear whether the work to complete them could be done at THHE yard in Pulau Indah or it need to be done elsewhere like the two Samudera.

KD Gagah Samudera and KD Teguh Samudera with their ship’s colours after the commissioning ceremony in 2018.

I am not a lawyer but based on the Edge report above, the government may well have to pay TH Heavy Engineering’s liabilities of around RM393.14 million as the company has no income. And this is on top of the RM738.9 million contract to build the three OPV was secured by THHE in January 2017. I am not sure whether the government has paid THHE the whole amount though.

A screenshot of TH Heavy Engineering shipyard at Pulau Indah on Google Map. OPV 1 or OPV Tun Fatimah is the ship in the first circle on top. The second circle are the location of the blocks for OPV2 and OPV3. The building on the left is where the other parts of the OPV are built. It is unclear when the satellite was taken as the Google only stated the images were taken in 2023.

The government also extended a loan of RM152.6 million to THHE early this year to ensure the completion of OPV1 within this year. The money was supposed to be enough to complete the OPV2 and OPV3 as well, Malaysian Defence had reported.

THHE travails is probably the reason MMEA had to accept offers of retired ships.

— Malaysian Defence

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27 Comments

  1. What could have happened is that the government only paid for the 1st ship in full from the total of RM738.9 mil contract. The loan of RM152.6 mil is probably paying off material and hardwares already sent by suppliers to THHE but not yet pass completed milestone to be considered as can be paid by government.

    So i think most of the RM393 mil is basically what is not paid yet by government (as the 2nd & 3rd ship is nowehere near complete) inclusive of the RM52.6 mil government loan.

    So who can complete the rest of the ships? I would say MMHE (Petronas), the 2nd OPV built onsite to floating condition and towed to pasir gudang, and the 3rd ship to be built in Pasir gudang…

  2. AFAIK, the RM393 million is debt not paid by THHE from its contractors for work on offshore projects and got nothing to do with the OPV project. The debt mushroomed following the collapsed of oil prices starting in 2014. The Najib administration gave the project to THHE as financial support for the company as it was one of TH subsidiaries then. One of my schoolmates worked in one of the those companies. He told that the company principals, from overseas, cannot believed that the people was part of the Pilgrimage Board

  3. So nobody will be held accountable as usual?

    These losses are why mnay of haj pilgrims now has to pay in full

  4. This is preposterous. With this failure , each n every ship building project for our navy n mmea has ended in failure. Will LMS n LCS batch 2 be heading in thevsame direction?. Its like throwing money into the ocean.
    More importantly, the defence n secirity of the nation has been seriously compromised

  5. I think mmea and tldm shld buy 6 victory class korvet and 4 sentinel class korvet and 4 endurant class lpd from Sg.

    Sg maybe give away free.

    Sg need strong mmea and tldm for peace in Asean. Not like this..

  6. Malaysia need strong mmea and tldm for malaysia.

    But looks like many doesn’t even believe that it can be done.

    Yes lots of past and present mistakes needs to be corrected, but if there is a will, it is within our capability and resources to get it done.

  7. … – ”… – ”But looks like many doesn’t even believe that it can be done.” Who are the ”many’?

    Actually, if you take the time to think; most agree with the ”Malaysia need strong mmea and tldm for malaysia” [your quote] but disagree with notions that the needs of both entities should be conflated …’

    … – ”Yes lots of past and present mistakes needs to be corrected”

    Correction, a new revamped holistic policy is needed.

    … ”if there is a will, it is within our capability and resources to get it done.”’

    Sound like a motivational guru at one of those talks where at the end all get up sing and hold hands. It’s not ”will”; we have the ”will” to do many things but see how they panned out.

  8. Dont give him the pardon.(Marhalim Abas)
    Hahahaha hahahaha hahahaha!
    I can’t say more. What’s the use when we have shitheads in our MinDef and KDN. Ah yes, censorship etcetera so none dare criticize the regime of the day.
    Am getting another Livita from the fridge.

  9. A glitch which hopefully wont last for 3 years yeah. Otherwise it is a real FUBAR.

    OPV1 being painted and looking almost ready is just smoke & mirrors with OPV2 and OPV3 yet to even join their hull modules the program is so way behind schedule yet nobody seemed bothered and all attention & endless RCIs / PAC reports goes to LCS.

    “Correction, a new revamped holistic policy is needed.”
    Easier said than done. When the whole Msia is rotten to the core there is no permanent solution by fixing certain parts. This is about correcting the 3R, NEP, patronage & politics, education, governance, how we elect our reps/MPs, & society as a whole. To really fix it, Msia must be fixed from top to bottom, the country, the government & the people.

  10. “Easier said than done”

    Never said it was “easy”; only what was needed for things to be done differently.

    “To really fix it, Msia must be fixed”

    As I’ve said before; the defence sector is a reflection of various things which have gone horribly wrong in this country.

  11. Azlan, so what then? Everyone knows its the system so what about ought to happen? Someone says we should do A, you say wishful guru peptalk powerpoint nonsense. Ok, then what would you do to change the system? I’ll just play out the flow so dont waste time. It’s not my job to change, it is someone else’s job. Who should do it? Its the politicians job. But the politicians are the system, so how do we get the politicians to change? I’ll stop at this point and let people ponder the circular and pointless nature of blaming the system and expecting the system to fix itself. The quote on insanity works well with such mindset.

  12. Kel – “I’ll stop at this point and let people ponder the circular and pointless nature of blaming the system and expecting the system to fix itself”

    You’re shooting the wrong calibre. It’s not about “blaming” anything but coming to terms with where we’ve gone wrong – we haven’t. It’s also about knowing and understanding where we’ve gone wrong and accepting that unless or until changes are made; in 10 years from now; news of a local company being awarded a contract but being unable to deliver will be on the news ..

    Kel – “Everyone knows its the system so what about ought to happen”

    No and don’t blissfully assume. Not “everyone so don’t speak for “everyone”. Some still insist BNS was solely to blame and you insisted BNS was the one which insisted all 6 be constructed locally. Others think it’s as simple as having a capable Defence Minister or having a larger budget; etc. Others think it’s because we can’t “think out of the box”. Some think it’s because of poor planning; for which I’ll ask; if we don’t even have the fundamentals in place; what do we expect?

    Kel – “I’ll stop at this point and let people ponder the circular and pointless nature of blaming the system and expecting the system to fix itself”

    How about your ‘mindset” then? I’ll also add that unless you’re hallucinating; nobody is “ expecting the system to fix itself” and maybe before adding what’s “pointless” or not; ponder what you mean to say.

    Kel – “ then what would you do to change the system?”

    This has been dealt with before. For your benefit we first need to acknowledge where we’ve buggered up; then we really need to decide what we want to achieve and at what cost. Last but not least we need to be realistic as to what we can and can’t achieve.

    At present – unlike the 70’s and 80’s when we were more focused – we’re neither here nor there and apart from cosmetic changes; we’re on the same self defeating path. We refuse to learn.

    I have answered you – like I have with other things – irrespective of whether you understand or agree…

    kel – “But the politicians are the system, so how do we get the politicians to change”

    Tedious aren’t we? As has been explained; there is no urgency or incentive to change. Not unless something drastic happens which jolts us and changes how we view things. As it stands neither the government or the opposition or the voter base is asking for change. Ponder on that before going off tangent and engaging in rhetorics and I would also add; asking questions for which you personally lack answers.

    If you can make the change go do it but don’t admonish others for pointing out what the problem is and suggesting they shouldn’t on the basis that they don’t have the answer or can’t facilitate change.

    Kel – “ you say wishful guru peptalk powerpoint nonsense

    Correction. Long before there was an individual with the ”kel” nom de plume; my stand was that what looks and sounds great on a P/L sheet or a Power/Point brief can differ greatly with actual reality. I also said that at times you sound like a motivational speaker and I have no idea if you’re expressing a view or making a statement; on top of that you have a knack for partaking in rhetorics and being pedantic.

    That is what I said; fully aware of what I said or didn’t say and I never claimed i was totally right or for that matter; above criticism.

  13. “so how do we get the politicians to change?”
    If we are really honest with ourselves and self reflect, it all boils down to this; the rotten system is from the Govt/those in power, who run the Govt? The politicians, Who elected the politicians? The voters, Who are the voters? The rakyat. So really all the shitheads are me, you, Azlan, Marhalim, and all the voting rakyats who put them there. Sorry to be blunt. We think change is about voting B because A is bad but now B is also just as bad, simply because they are not the right ones too but we are too analed to think about Option C or D.
    If change has to happen it has to be from rakyat mindset & society as whole.

  14. BTW this article – although dated – sums up how we how we handle things; a mix of deterrence; diplomacy and confidence building measures with regional and non regional players. It notes that our foreign policy has been marked with consistency. In short whoever’s in power; despite some minor changes overall policy remains unchanged.

    There is another article which notes a pertinent fact; to avoid unnecessary tensions and for other reasons we do not focus on a specific threat. This has a bearing on the MAF.
    In turn this begs the question; how much of what we get should be threat as opposed to capability driven?

    https://www.thinkchina.sg/amid-domestic-political-change-malaysia-sticks-trusted-formula-south-china-sea-disputes

  15. Ok, so how do we change, or what then? What’s really the point of saying someone is wrong knowing that they are actually not wrong? Azlan seems to think what is happening is the correct decision despite knowing its wrong simply because it is what is happening – the “realist” but really its CYA and cheerleading to avoid being wrong. So skipping a few steps to determine what is a right decision, perhaps you can provide in clear description the following, 1) What do you consider as minimum or minimal for MAF, 2) What is your definition of low-intensity or non-protracted, 3) Who do you consider peer, and 4) What do you think is considered deterrence? Various people are willing to put their heads on the line by answering those questions to support their positions, kel included. So the responses should be Azlan’s own opinions, not what MAF or politicians are doing. I understand hulubalang’s proposals on the basis of his recommendations – right or wrong. But I have not read Azlan’s assumptions to those questions to understand why everyone else is wrong and Azlan is correct.

  16. “If change has to happen it has to be from rakyat mindset & society as whole”

    Yes, true. Problem is with society as a whole and with the politicians from both sides of the divide; there is no incentive or compelling need to really change the defence policy..

    “too but we are too analed to think about Option C or D.”

    Agreed but is there at present an “Option C”? I don’t see it.

  17. “ut we are too analed to think about Option C or D.
    If change has to happen it has to be from rakyat mindset & society as whole”

    Agreed but two things.

    – Is there an “Option C”? Don’t see it.
    – When it comes to defence the reality is that neither the politicians or the voter base see the need or are aware of the need to change. That’s a major issue – due to history and other factors people are largely complacent about defence; same reason why the MAF is not a national institution or in thr national psyche the way the SAF or TNI are.

  18. Kel – “ Azlan seems to think what is happening”

    I “seem to think” you really need to try to understand what others mean before hitting the keypad and you need to learn the art of paragraphs.

    Kel – “Ok, so how do we change, or what then”

    Instead of pedantically engaging in rhetorics and asking questions which you’re clueless yourself; endeavour to find an answer.

    Kel – “What is your definition of low-intensity or non-protracted”

    Have a habit an regurgitation don’t you? Answers have been given; perhaps find your answers if you aren’t satisfied or indulge in research. There is really only one definition of non protracted” like largely a single definition of “dead”.

    Kel – “But I have not read Azlan’s assumptions to those questions to understand why everyone else is wrong and Azlan is correct”

    I have not “read” into your motive and you views: a well as your knack of obfuscation and making things unnecessarily complex.

    Kel – “ So the responses should be Azlan’s own opinions, not what MAF or politicians are doing”

    Ahh but you have your answers. Problem is you can’t see them or aren’t able to even if they were dangled in front of you l. I have given my opinions.

    Kel – “support their positions, kel included”

    In the Third Person now and you heard the part on self serving self praise?

  19. For your benefit I will answer – again – your questions. After this if you still insist you have not received answers; I’ll take it as given that you’re indulging in obfuscation for self gratification or that it’s congenital.

    1) What do you consider as minimum or minimal for MAF

    What’s “minimal/minimum” would depend on the ability to sustain something; no point having 8 squadrons if half of thrn are grounded for half the year. It would also depend on the third of conflicts one foresees and against the type of opponent. Nothing happens in a vacuum; in general ones’s force structure says a lot about the type of conflicts they expect.

    No such thing as a one size fits all solution.

    “2. What is your definition of low-intensity or non-protracted, 3) Who do you consider peer”

    Quite plainly obvious; a “non protected conflict” is one which is not extended; as opposed to a long drawn out ones. Examples were given in a previous post.

    “Peer”

    Firstly a “peer” is someone who has similar capabilities; whether in terms of assets or tertiary capabilities. Secondly we hardly have any “peers” in the immediate neighbourhood anymore.

    “4. What do you think is considered deterrence”

    Having the ability to make it counter productive for the other side to initiate hostilities; to make it to pause and consider. Note that the level of deterrence which can be achieved is based on resources and policy decisions.

    You have a penchant for asking questions; some of which have been answered and some of which can be found with some research. Here’s my turn to ask – again – a question : what happens when one’s “deterrence” fails to “deter”?

    What then Professor?

    Kel – “not what MAF or politicians are doing”

    The issue is; you need to have a firm understanding of what the official policy is [based on various things you’ve said I question this] before going around giving your own alternative policies .. Previously it was an epiphany when you were told that we structure the MAF for short and not very sharp wars; something readily apparent when looking at its force structure and how we go about things.

  20. Joe “This is about correcting the 3R, NEP, patronage & politics, education, governance, how we elect our reps/MPs, & society as a whole. To really fix it, Msia must be fixed from top to bottom, the country, the government & the people.”

    If you had voted in A then B then C then C+A then B+A and nothing really changed. That just mean we are a stable country that had reached the equilibrium point and nothing ever going to change. Or as Azlan put it “despite some minor changes overall policy would remains unchanged”.

    So rather than continuous on hoping for a revolutionary changes (like being tougher to PRC or adopt a quantitative approach to defense or buying everything overseas) & continuous being disappointed that it didn’t happened, one would be better of accepting reality. MY is afterall a democracy & her interest & policy is dictated by whole of society rather than few individuals.

    The whole of society had decided that we (with some minor changes) would continue with qualitative defense approved, we won’t be tough on PRC & we would continue building weapons locally and that’s that & it won’t change no matter how loud any individual shout on the internet.

    Not saying major changes couldn’t happen but for it to happen it would require a major catalyst to convince the whole of society to change it mind and then & only then the country interest & policy would changed.

  21. “Is there an “Option C”? Don’t see it.”
    “stable country that had reached the equilibrium point and nothing ever going to change”
    Your wrong, thats because A, B & C are permutations of each other. Have you considered Option D, perhaps one was never in politics? During GE15 many theocrats participated but nearly none got elected. Why? Because the rakyat mindset is too fixated on A, B & C. As I said, the politicians in Parliament are a reflection of the rakyat that voted them in. When one said they will change the system, and they got elected, do we hold them to what they promised, do we hound them to a dateline for change to happen?

    “neither the politicians or the voter base see the need”
    Thats because the system sees lesser needs. That we all understand. So how to work within these restrictions? Since were well aware defence project fundings are used (and will be used) for national projects expenditures, why cant we budget extra to cater for it? LCS budget was pared to the bone just enough for the boats but then it was hacked off for BNS upgrading, to buy missiles, for extra technical support, & other ancillaries leading to a budget shortfall hence why we can no longer complete the 6th boat. If we started off with a RM 12Bil budget and raising it to 13Bil due to inflation, this would not have severely disrupted the project as today.

    “would require a major catalyst to convince the whole of society to change”
    This is what Im trying to say, your chances of winning RM 1mil at Genting is higher than that to happen and nothing short of a peoples revolution will change that top to bottom, so why some are hanging on to this idea instead of considering what we can do to improve things with the lemons we are given.

  22. ”Your wrong,”

    If you say so but I asked a question; didn’t say I was ”right” …

    ”This is what Im trying to say”

    Glad to hear it because notwithstanding what you’re ”trying to say”; I’ve said it for quite a while now; until or unless something drastic happens [i.e. RMN losing 2 ships in a border clash]; neither the government or the opposition or the average citizen will see defence as a priority. Lahad Dato was a wake up call – to use a cliche – in that it exposed various deficiencies but whether certain things were rectified at a local level or actually implemented as policy is unknown.

  23. “I’ve said it for quite a while now”
    Many here are well aware what is the real problem and what is really needed to truly solve the problem, we need to solve Malaysia. But as this is cloud cukooland dreaming, why cant we consider what realistic ways to make some changes to make thing better? So no need to be a broken record here, as your also keep telling others that.

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