PAC Report on LCS October 9 2023

The LCS major equipment detailed by RMN in 2016. RMN graphic

SHAH ALAM: The Public Accounts Committee has made public its report on the LCS today which covers the period from October 2022 to May 2023. The report did not reveal anything much of about the project apart from confirming in a roundabout way that the LCS cost will go higher due to the nationalisation of the Boustead Naval Shipyard (BNS), the builder of the ships.

It must be noted that the report stated that the extra RM2 billion added to the original ceiling price of RM9.1 billion was due to the delay in completing the project and not the new equipment (see graphic below). Nor the liabilities incurred by BNS and its debt to its parent company as I posted here.

The breakdown of the additional cost for the LCS project. PAC

Yes, the government could always say that the cost is RM11.2 billion as announced last May and repeated in in the PAC report but it will be much higher as stated here and here.
The executive summary Part 1. Of course they had to use the outline of a US Navy Aegis destroyer instead of the LCS. PAC

As the report is from October last year and May, this year, unfortunately, there is no statement on whether work on the LCS has resumed or not. The report did acknowledge that no work was done on the ships until this June.
Part 2.

The only thing surprising in the report was that the sixth supplemental agreement signed by the Defence Ministry and the BNS/BHIC in May, before it was vetted and approved by the Attorney-General Chambers.

Kedua, sebab tadi kita mendengar juga kan, Yang Berbahagia Datuk Dr.
Shahrazat bahawa perjanjian perlanjutan keenam telah pun ditandatangani.
Sememangnya wakil daripada Peguam Negara telah berjumpa dengan pihak-pihak
berkenaan untuk berunding. Walau bagaimanapun, draf perjanjian yang diberikan
kepada pihak MINDEF sebenarnya memerlukan tindakan lanjut untuk dikemukakan
kembali kepada Jabatan Peguam Negara. Walau bagaimanapun, ia telah pun telah
ditandatangani. So, hanya untuk rekod Tuan Pengerusi. Terima kasih.

Part 3 .

Posted as images (above) are the executive summary of the PAC report. If you want to read the full report, please go to the Parlimen Malaysia website. Below are images on the latest schedule for the LCS and the cost of the ships based on the latest contract.

LCS schedule based on the sixth supplemental contract. PAC

The schedule above was part of the supplemental contract signed last May and only made public due to the PAC report.
The breakdown of the cost of each LCS. PAC

— Malaysian Defence

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Shah Alam

15 Comments

  1. from the graphics, the cost to build the 6th LCS Gowind is put at RM571 million, which is lower than the cost budgeted for the LMS batch 2 which is RM833 million per ship.

    TLDM is requesting RM2.5 billion in RMK12 (2021-2025) to fund 3x LMS Batch 2, plus 5 more LMS Batch 2 for RM4.1 billion in RMK13 (2026-2030)

    If, the cost to build the 6th LCS Gowind is taken from the LMS Batch 2 budget for RMK12, there will still be RM1.9 billion left.

    So TLDM will get 6x LCS Gowind, and RM1.9 billion leftover from LMS Batch 2 budget in RMK12 2021-2025, plus RM4.1 billion leftover from requested in RMK13 2026-2030 for 5 more LMS Batch 2.

    My suggestion for TLDM 20 year plan to 2040

    RMK 12 2021-2025 (USD2.0 bil)
    LCS Gowind 1.15 Project continue (assume balance RM5.2bil need to be budgeted in RMK12)
    LCS Gowind 0.125 Assembly cost for 6th Gowind
    13 FIC batch 2 0.03 Gading G2000 MkII FIC
    12 LMS-X Damen FCS5009 0.4 including surface attack missile module.
    3 70-80m OSV 0.1 auxillary ship, MCM mothership, SF support, SUB support, UAS support, pipeline security/surveillance
    5 AW139 MUH batch 2 0.1
    4 RQ-21A Blackjack UAV (used) 0 4 systems of 5 airframe each. ex USMC retired. Free US EDA
    total 1.905

    RMK 13 2026-2030 (USD2.0 bil)
    1 Scorpene SSK 0.6 assembled in Sepanggar
    12 LMS-X damen FCS5009 0.4 including surface attack missile module.
    2 Fast RORO (used) 0.04 replacement for MPCSS. Similar concept to Spanish Navy Ysabel
    1 Fleet tanker 0.09 replacement of BM5, BM6. STM Turkiye fleet tanker 17,000 ton. MMHE
    top up NSM and VL MICA NG missiles 0.3
    8 SH-60J Seahawk 0.2 ex-JMSDF airframe + new avionics, radar, sonar
    2 MCM modular system set 0.15
    6 ASW module for LMS-X 0.12 KraitSense system / Sea Serpent system
    total 1.9

    RMK 14 2031-2035 (USD2.4 bil)
    1 Scorpene SSK 0.6 assembled in Sepanggar
    2 Arrowhead 140 Frigate 1 Kasturi Class replacement
    1 Fleet tanker 0.09 replacement of BM5, BM6. STM Turkiye fleet tanker 17,000 ton. MMHE
    top up LMS-X surface attack module missiles 0.3
    2 MCM modular system set 0.15
    UAS, USV project 0.2
    total 2.34

    RMK 15 2036-2040 (USD2.4 bil)
    2 Scorpene SSK 1.2 assembled in Sepanggar
    2 Arrowhead 140 Frigate 1 Lekiu class replacement
    30 FIC replacement 0.1 For PASKAL SF support, replacement CB90, G2000
    total 2.3

    TLDM 2040 Fleet
    6 Scorpene SSK
    4 Arrowhead 140 Frigate
    6 Gowind Frigate
    24 LMS-X Damen FCS5009
    30 FIC
    2 Fleet Tanker
    2 Fast RORO
    3 OSV support
    1 Sub Rescue (leased)
    8 SH-60J ASW
    8 AW139 MUH
    RQ-21 Blackjack UAV
    MQ-27 Scaneagle UAV

  2. – I really fail to see what added value there is to have SSKs assembled locally; for one; by the time we get around to assembling the next batch; whatever experience/knowhow we gained would have been lost. Local assembly benefits the local industry and gives the politicians bragging rights but try as I might; fail to see how it would really benefit the RMN or taxpayer in the long run.

    – Do you mean ”tanker” or oiler”? If it’s ”oiler” we simply don’t need them and that’s precisely why we’ve never had a need for them, nor has any RMN man I’ve asked actually said they feel it’s needed. Most of our ships are at sea 2-3 weeks; are not more than 2-3 days sailing time to the nearest base/port and they carry emergency fuel in case they have to stay on station a bit longer. We would only need an ”oiler” if we performed extended ops far from our shores; as rare as the tooth fairy.

    – 2 Fast RORO. Yes and perhaps manned by the naval reserve. Ro-Ros are great but they are one trick ponies; i.e. to move stuff from point A to B. For something with more operational flexibility in a more challenging environment a MPSS is still needed.

    – SH-60J Seahawk. My concern here is not whether they can be acquired ”cheaply” and fitted with new gear but sustainment costs associated with high mileage airframes; even ones in relatively good condition and many hours left.

    – RQ-21A Blackjack UAV. I would like to see a small UAS operated from most RMN ships as a complement to the ship’s sensors and embarked helos [if any]. I’m also hoping that once they enter service the RMN will reconsider their decision many years ago not to operate a UAS from the LCS. There is space in the [enlarged] hangar to accommodate both a helo and a ”small” UAS.

    – 6 Scorpene SSK. I would like to see the needed shore support infrastructure expanded to another base; in the Peninsular. It may not be as comprehensive as Sepanggar but would have some level of infrastructure to support SSKs; whether on temporary or permanent deployment.

  3. VO of SSM from one made by MBDA (I assume it’s the Exocet) to the NSM. 3 reasons were given in the report:-

    1. the specs meet TLDM’s requirements
    2. NSM has the latest technology
    3. NSM is cheaper

    During his testimony, RMN’s Project Director First Admiral Franklin Jeyasekhar Joseph gave another reason i.e. that the NSM is smaller and easier to be installed on the ship.

  4. My reasoning

    – Scorpene local assy. Right now we are doing the 10 year overhaul for our 2nd Scorpene. Almost 80% of what is done for overhaul (hull rewelding, replacement of batteries, refitting all equipment inside the pressure hull etc.) is similar to assembling new submarines. So the knowhow right now is there. The same knowhow could be used to build 1 scorpene in RMK13, 1 in RMK14 and 2 in RMK15. IN RMK15 at the same time there would be 1 new sub assy and 1 sub undergoing 2nd refit. Hull sections could be bought either from India or from Brazil, both which are building scorpenes of their own.

    – Fleet tanker, replenishment oiler etc. Whatever the nomenclature is, i am just reusing the original project name.
    https://www.stm.com.tr/en/our-solutions/naval-engineering/pakistan-navy-fleet-tanker-project
    My reasoning for such a ship: As a way to support friendly and allied ships undertaking operational missions in zon maritim malaysia. While we probably don’t have the money to buy high end frigates/destroyers, what we can do is to give logistics support to them when operating in our waters. The range and endurance of such ships is also ideal for TLDM to do long range escorts of Malaysian civilian ships in international SLOC, such as ops fajar. Also as another type of ship that can do enduring presence at sea together with APMM OPVs and TLDM frigates.
    https://pbs.twimg.com/media/Fzn-r5UWYAAnbL8.jpg

    – RORO. What we mostly need is to transfer stuff from west to east malaysia and vice versa. We are defending our own territory, not invading others. Operational needs can be mitigated by pre-positioned stocks of army hardware in east malaysia.
    https://santacruzmipuerto.com/images3/noticias/ysabel/4.jpg

    – SH-60J Seahawk. Its a tradeoff we could take. 200 million for 8 ASW helicopter instead of 900+ million for same number of romeos
    https://www.defensenews.com/naval/2022/03/15/state-department-approves-possible-mh-60r-sale-to-spain/
    The catch is a planned use of just about 15+ years, with replacement date of around 2043-2045. Its a reasonable tradeoff as by then there would be much more advanced tech anyway rather than the old 1970s blackhawk airframe.

    – blackjack is there because it is free (retired by USMC) and uses the same support equipment (launch, retrieval, control system) as the scaneagle. New systems should be bought replacing both scaneagle and blackjack in RMK14, along with USVs.

    – sub infrastructure. I would want a covered submarine pen, like Thailand is building, so our subs in port cannot be seen by satellites. The 3 OSVs could be used like US navy submarine tender, along with other tasks such as MCM mothership, SF support, underwater infrastructure defence etc. So if a sub going to a port other than Sepanggar, an OSV could be there to support it.
    https://www.navylookout.com/wp-content/uploads/2023/09/RFA-Proteus-Mersey-2.jpg

  5. MCM payloads.

    Yes we have discussed this previously.

    They’re two schools of thought here. One has it that in the age of tightening budgets; many navies but especially small resourced constrained ones simply can’t have ships which only specialise in one role. The idea being that ships should be multi role as it enables operational flexibility and cost savings.

    The other school of thought has it that for certain niche roles crews simply won’t have the needed proficiency if they’re required to be multi tasked. As a former CO of the MCMV Squadron once told me; MCM is very challenging; much more than say ASuW; requiring time and lots of practice to acquire the needed proficiency and to also ensure that skills don’t atrophy and crews have to focus on their primary task; i. e. the MCMVs of course conduct a lot of routine patrols but their primary skill set and one which they regularly train for is MCM. If they were crews of a multi role ship with modular payloads; the question which arises is how much time would they actually get to practise MCM? Just because modular payloads are available doesn’t mean they’ll always be fitted; as seen by the experience of certain navies.

    In short there is no right or wrong [yes I know on paper they’re lot of things we can buy and do and you have all the links] but
    what suits the requirements of individual navies and what actual funding enables. There is also the question of how effective a particular solution [there is no one size fits all
    solution; what works for one navy might not work for another] will be for individual navies : “measure of efficiency” versus “measured of success”.

    Sure, at the moment there is no cash for a new class of dedicated purpose built MCMVs but if we’re going to go on the basis of what we can’t afford at some point in the future; wouldn’t be much to talk about here. It’s also very telling that some navies; including ones which are considered premiere” MCM navies have not gone down the modular payload approach.

  6. Yes, I read the report. With all due respect to the admiral, the ship was designed for the Exocet, installing a smaller missile does not make it easier.

  7. … – “we probably don’t have the money to buy high end frigates/destroyers”

    Isn’t only a question of money but also policy/threat perceptions. Question is at present and for the foreseeable future; do the policy makers see the need for a “high/end” frigate/destroyer”?

    Does a country which only sees the need to buy fighters in batches of 18 in intervals of 10/20/30 years and has an army which due to various reasons has only has a mere 28 155mm pieces [yes I know you have ideas on how to rectify this] but 5 divisions and which hardly ever exercises in even brigade strength [as in the whole brigade actually participating] see the need for a navy which would need say a 96 cell VLS? Do we see a scenario in which any MAF asset would find itself in a highly non permissive environment? Right or wrong; agree with it or not the answer is clearly no.

    … – “Fleet tanker, replenishment oiler etc”

    A “tanker” is a vessel intended to transport fuel; an “oiler” is a vessel needed to replenish ships at sea. Two different things; hence my question.

    The possibility of us doing something similar to Ops Fajar again is as rare as the tooth fairy.
    Sure nice to have certain capabilities even if we’d hardly see use it but using this argument one can also suggest we get C-17s in the off chance we might need the lift capacity it enables.

    … – “the nomenclature”

    It’s not about “nomenclature” as they are two different things. As different as a “FAC” and a “corvette” or a “LMG” and a “GPMG”.

    … – “My reasoning for such a ship: As a way to support friendly and allied ships undertaking operational missions in zon maritim malaysia”

    Granted but my “reasoning” is that we simply do not need any; anymore than we would need a hospital ship. Yes on paper it would be nice to have but so would various other things.

    … – “covered submarine pen, like Thailand is building, so our subs in port cannot be seen by satellites”

    There are other ways one can assertion if any of the boats are at sea; for one there might be certain signs; irrespective of whether the actual boat isn’t visible and at present there are only two which makes it easier to gauge or predict with some level of accuracy cycle periods.

    Rather than a “pen” or a covered structure to prevent detection the cash would be better spent expanding the short support infrastructure to enable say Tanjung Gelang to support SSKs rather than just having Sepanggar. Also, a “pen” which also is enables a boat to immediately dive unseen would be extremely expensive as it would involve a lot of dredging. The moment they put to sea boats have to move on the surface quite a bit before they get reach waters deep enough to dive. In the Kola peninsular the Soviets had “pens” which enabled boats to dive unseen but the waters there are much deeper.

    BTW we did receive an offer by the Swedes for an underground SSK facility; years ago. Najib mentioned it.

    … – “ Scorpene local assy”

    My reasoning it that it enables no long term tangible value to the end user or taxpayer. It will benefit the local industry and give the politicians the usual bragging rights and opportunities for hubris.

    … – “. The same knowhow could be used to build 1 scorpene in RMK13, 1 in RMK14 and 2 in RMK15”

    On paper great but in reality we might end up with a situation where by the time we actually buy any; all the chaps who gained the needed experience were long gone. Just like how the bulk of people who had experience with the Kedahs were gone by the time the LCSs were signed for. Another pertinent question is what actual benefit is there in terms of tangibles : none. Also not as if the next step in progression after local assembly is local design.

    Also, 6 boats are nice but do you have any idea as to how much manpower and other resources would be needed to support a fleet of that size? The RMN only has about 15,000 people give it take [a sizeable number don’t even serve on ships/boats] and the number of people joining annually has remained at the same level for quite a while now. Not to mention the actual shore support infrastructure that would be needed. There is a reason why for the next few decades the RMN only sees a need for 3-3 boats; that is the number it can managed with the actual resources it has and will have.

    … – “a tradeoff we could take. 200 million for 8 ASW helicopter instead of 900+ million for same number of romeos“

    Great buy possible penalties? My concern is sustainment costs associated with aged and high mileage platforms. No point gaining short term costs saving if in the long term there are sustainment issues. As it stands we can’t even afford to run all 6 Lynxs; a pair have been stored.

  8. Hulubalang – “We are defending our own territory, not invading others. Operational needs can be mitigated by pre-positioned stocks of army hardware in east malaysia.”

    That’s what you wanted MAF to do not what the gov nor MAF wanted to do. Do note that individuals even if the accent to the highest position of power by being PM do not have the power to change a nation trajectories.

    If you wanna play procurement planning you need to understand the national interest first and designed your plan around it not go around trying to push your own personal interest as the national interest.

    If you look at MAF procurement plans as well that’s of our neighbours. The goals is seem to be towards regional defense rather than just territorial defense and the emphasis is still towards quality not quantity because as said many times before the quantity would be there when people work together.

    In general there’s are a lot of good reasons why nations want to work together. For starters PRC is such a monstrosity challenge for any individual nation to face alone & there’s a lot of social, economical & political benefits for PRCs neighbors to work together. So there’s really no point in your extremely nationalistic let’s do it alone plans. We aren’t being restrained like Vietnam now or Finland before and thus we as a nation would never do what Vietnam & Finland did.

    One also can’t just change the wildcat with seahawk on a one a one on one basis because the wildcat is part ASW,part attack helo, part transportation helo. Basically if you bought seahawk you’ll then need to bought Apaches as well.

    The MRSS is also part transportation platform & part ASW platforms. If you change the MRSS into RoRo. You would need more ASW capable ship to carry ASW capable helo but even then without a MRSS there’s no platforms to carry the Apache around.

    Tanker & oilers are great and all but if it’s only jobs is only to refilled foreign naval vessels then more cost effective approach is just to grant port & bases access to them.

  9. Zaft – “If you look at MAF procurement plans as well that’s of our neighbours. The goals is seem to be towards regional defense rather than just territorial defense and the emphasis is still towards quality ”

    I have no idea what “regional” and “territorial” defence means in this context and I doubt if you really do but as I mentioned; with the exception of the SAF all the other regional countries have militaries which are not structured; equipped, funded or trained for anything beyond short limited conflicts.

    Since you’re so well acquainted with the facts as they were; you’ll also know that until relatively recently most regional armies – unlike Singapore’s – were focused on internal security and this is still very apparent by looking at organisations and other things.

    Zaft – “The MRSS is also part transportation platform & part ASW platforms”

    The RMN has no plans for the MPSS to be a “part ASW platforms” – period/full stop.

    Zaft – “ a lot of social, economical & political benefits for PRCs neighbors to work together”

    So? You do realise that we have things such as the ASEAN Defence Minister’s Meeting; the Shangri also dialogue and various other forms of consultations/dialogue. You also realise [probably not] that there are deep divisions within ASEAN on god to handle China and that complicating matters is that various ASEAN countries have competing claims against one another.

    Zaft – “wildcat is part ASW,part attack helo, part transportation helo”

    On that basis the S-70; sharing a common design with the UH-60; is also a “part transportation platform”. Do you even know what point exactly it is you’re trying to make?

    Also, when was Wildcat part “attack helo” [BTW “helo” signifies a naval platform] and “part transportation”? There was a Lynx army variant but not Wildcat. Also if anyone buys Wildcat it’s “transportation” capabilities will be the very last thing in terms of priorities; in case you’re unaware the Lynxs/Wildcat has very little lift capacity; why do you think the RMN got new platforms? Answer : because the Lynxs and Fennecs have very limited lift capacity.

    Zaft – “aren’t being restrained like Vietnam now or Finland before and thus we as a nation would never do what Vietnam & Finland”

    For some context Finland was part of the Russian empire for a long time. Vietnam was colonised by China for almost a century and it received a lot of external help against first the French and then the Americans. It also benefited from the fact that the Americans has strict ROEs and Vietnam shares borders with Laos, Cambodia and China.

    Zaft – “That’s what you wanted MAF to do not what the gov nor MAF wanted to do”

    By your comments here and elsewhere; do you actually know what the government and MAF wants? Do you know or even understand the subject matter or the policy we have?

    By your comments you made it sound like “…” was talking about spaceships, laser blasters and orgies by the beach with mermaids.

    Zaft – “Basically if you bought seahawk you’ll then need to bought Apaches as well.”

    What utter utter drivel, nonsense. I really have to ask if you’re on hallucinogens or if your trying to provide some entertainment?

  10. @hululublang
    The LMSX is nice concept but we already commit to LMS B2 as corvettes. The LMSX (your configuration) will have some drawback that I would like to improve particularly in self protection capabilities. LMSX, though can be protected by LCS or LMS B2, should have some level of self protection capabilities. Update LMSX should have any combination of

    – 1x Milenium 35mm CIWS in A position
    – 4x Mistral VSHORAD in 1x Tetral mount
    – SPS-540K PESA X band radar
    – 1 FCS unit (whatever chosen for KD Laksamana Muhammad Amin) to operate 35mm CIWS

    All of this might cost additional usd20-25 million. Which makes LMSX close to usd55 million, if excluding the radar it could be only usd45 million, still much cheaper than LMS B2 which is around usd200 million. 12-16 updated LMSX should be enough number to support 6 LCS, and 8 LMS B2 with 1 LMSX supporting 1 LCS/LMS B2 that is still able to defend itself at least against subsonic ASHM and able to operate independently.

  11. Luqman – “ that I would like to improve particularly in self protection capabilities. LMSX”

    Whether it’s the “LMSX” or anything else by right a ship should have both a hard kill and a soft kill option; the soft kill option not being confined to just chaff.

    Luqman – “1 LCS/LMS B2 that is still able to defend itself at least against subsonic ASHM and able to operate independently”

    In this day and age nothing by right should operate “independently”. If not operating physically alongside other assets; a ship should at least be networked to something else

    As for “subsonic ASHM” is a ship has a VLS then on paper it would be able to defend itself but in reality in would depend on various factors; how much early warning; does the attack comprise a single [unlikely] incoming ASM or multiple ones coming from different directions; is there jamming/spoofing at play, etc?

    We see our ships operating in fairly permissive or non high intensity scenarios and that’s why – together with funding issues – they are modestly armed.

  12. ….

    Thanks for the links but by concerns still stand; as do the issues I’ve raised. I simply do not see the need for an oiler [on paper we need lots of things but actual need is different]; I have reservations as to the utility of MCM payloads in our context [so do quite s few serving people] and I do not see any tangible benefits to gained from local sub assembly.

  13. @ azlan

    noted. lets put that down as agreeing to disagree.

    As for the oiler, this is the specs
    https://pbs.twimg.com/media/Fzn-r5UWYAAnbL8.jpg

    I am looking at it from the perspective of being our contribution to our allies in their mission of free and open indo-pacific by providing replenishment support to their destroyers and frigates. The same reasoning why RNZN have their new HMNZS Aotearoa and RCN with the MV Asterix.
    https://upload.wikimedia.org/wikipedia/commons/f/fd/HMNZS_Aotearoa_%28A11%29_refuels_USS_Howard_%28DDG-83%29_in_the_Pacific_Ocean_on_23_November_2021.jpg

  14. … – ”I am looking at it from the perspective of being our contribution ”

    I’m ”looking at it” from a purely practical perspective. Lots of things we could need on paper. By your logic; we could need C-17s but how often would we need them and at what expense? As it stands neither the RMAF or RMN respectively need anything larger than a A400M or a oiler. It’s not as it we intend on conducting standing patrols in the Aleutians or Caribbean.

    We need an oiler as much as an Inuit needs an ice maker or the Cambodian navy needing a hospital ship,

    … – ”The same reasoning why RNZN have their new HMNZS Aotearoa and RCN with the MV Asterix.”

    You missed the part where the RNZN has to travel quite a bit to reach South East Asia.

    You come up with various things but one is strikingly apparent; you tend to miss out all the parts which don’t support your narrative. A balanced assessment entails looking at both sides of the picture in totality. Not just the parts we like or the ones which fit into our narrative.

    As for sub local assembly. Great for the local industry but zero tangible benefit for the RMN or taxpayer. I asked a serving RMN [who is aware and understands the vast limitations his service has to deal with] about his opinion on an oiler and local sub assembly. I won’t post his answer as this is a public forum an some level of decorum is needed but you get the idea …

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