PAC Unhappy With Utusan Report on LCS

PCU Maharaja Lela - LCS1 - picture taken on January 1, 2023. DSU Mohamad Hasan.

SHAH ALAM: Public Accounts Committee chairman Datuk chairman Datuk Mas Ermieyati has accused Utusan Malaysia of breaching a Dewan Rakyat Standing Order by publishing a premature report of its proceedings.

From the Malay Mail:

The Masjid Tanah MP added that is seeking direction from Dewan Rakyat Speaker Tan Sri Johari Abdul on what to do next about the article titled “Kurangkan kapal LCS jimat kos – Saksi” (Reduce LCS to save cost – Witness).

“The Public Accounts Committee (PAC) takes a serious view of the Utusan Malaysia article dated 12 June 2023 titled ‘Kurangkan kapal LCS jimat kos – Saksi’ that stated the government has decided to reduce the number of littoral combat ships (LCS) to be built from six to five on grounds of saving cost.

“I regret this article because it clearly can disturb PAC’s investigations, summary and recommendations for this proceeding,” Mas Ermieyati said in a statement this afternoon.

She alleged that the article violates Dewan Rakyat Standing Order 85 that relates to premature publication of evidence.

“I have written a letter to Dewan Rakyat Speaker Tan Sri Johari bin Abdul to inform him of the SO 85 violation and request guidance on this issue,” she added.

SO 85, which deals with the premature publication of evidence, states that “the evidence taken before any Select Committee and any documents presented to such Committee shall not be published by any member of such Committee, or by any other person, before the Committee has presented its Report to the House”.

The Utusan article quoted an unnamed source as saying that the government had made the decision to build only five out of the planned six LCS in order to save on costs, based on what three witnesses had told the PAC members when it visited Boustead Naval Shipyard on Saturday.

The report stated that the three witnesses as BNS chairman Datuk Ahmad Nazim Abd Rahman; Defence Ministry Deputy Secretary-General (Development) Datuk Dr Shahrazat Ahmad and BNS CEO Azhar Jumaat.

It is funny that the story/witnesses said the government made the decision to build only five LCS instead of six to save costs when we know the cost had gone up to RM11.2 billion. But this report again confirmed that the cost to finish six LCS as Malaysian Defence had already written, was between RM12 billion to RM14 billion.

Again, it must be stated that I am not at all confident that the RM11.2 billion will be the final cost. It is also interesting to note the Defence Ministry had earlier said they wanted to finish the first two LCS first before deciding on the next three. Clearly something had changed within the last few months that they went for broke.

— Malaysian Defence

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13 Comments

  1. Learning curve to build ship locally is difficult & expensive but buying ship from foreign yards for perpectuality is far more expensive.

  2. Should have let Naval Group build at least 3 of those ship first then let Bousted build the remaining ships. But ehhh politics

  3. Yes..maybe bns should built the following three but no they gave bns the contract to build all lcs in house..If we built the first 2 or 3 outside and this fiasco still happened for other ships at least there are ships that actually completed and comissioned into service unlike 0 ship right now..All for that imaginary ‘national naval shipbuilding ecosystem’..ecosystem my foot..RMN wasted enough time already with this LCS Bs

  4. The MP need to learn very well on this issue before make a statement or only for thier popularity purposes…it surely if anything specification change & prolong duration of project, surely the supplementary agreement will appear…

  5. The problems with the LCS is not we are dumb and unable to glue together a ship but the problem with LCS is the weapons, system initially selected is not ideal for RMN operational requirements.

    Asking DCNS to build it solve nothing. A complete ship that unable to fills the roles it’s meant to perform is equal pointless.

  6. We were too smart, too smart to squirrel away the money whenever possible. Anyhow how are the weapons being the problems, they have not been installed yet.

  7. The per unit cost should no longer be factored when making decisions on the LCS. To lower the per unit cost would require a long-term buy beyond 6 ships which isn’t likely to happen. Instead finances specifically “cashflow” should be the main driver of how many ships to buy and when to buy. Ideally, the government should have done a 2 firm-fixed cost order (LCS1 and LCS2), and a 4 ship IDIQ option, vs. the current 5 firm-fixed cost (for LCS1 through LCS5) with a 1 ship IDIQ option (for LCS6). A 2+4 order means the government doesn’t have to lock in most of the shipbuilding funds for the LCS today – for example ensuring funds will be available for LMS Batch 2. By committing to a 5 ship order, the government has to lock in the funds today, which seems to be impacting the LMS Batch 2 program – either having to cut the budget, or not having room to increase the budget.

  8. Zaft – “The problems with the LCS is not we are dumb and unable to glue together a ship”

    How do you come up with the things you do? The actual “problems” can be listed on a page and have been widely discussed and are not related to the weapons as you confidently but erroneously claim.

    Kel – “which seems to be impacting the LMS Batch 2 program – either having to cut the budget, or not having room to increase the budget”

    Maybe, maybe not. As I alluded to earlier it’s too early to form conclusions. Strange things can happen.

    Having long posts in paragraphs instead of one huge blob makes it easier to digest …

  9. Probably they did look into future. But the latest deal is to ensure that LTAT does not suffer any losses or other obligations when it passes BNS back to the government. The government can absorb any financial obligations but LTAT cannot. What matters now is to get the five ships into the water by hook or by crook.That said it was the government – under another leadership which had basically pushed – Boustead to take the mess which was PSC NDSB which turned into BNS.

  10. Yeah? Still A big fat NO for me.RM 2.24 billion could rise to 3 bill pership for a ‘mere 3100 tonnes,111m is an outright extortion.I dont want to bring politics here but someone clearly want to be a hero before saying they will bring the crooks in lcs scandal to justice but instead they add 2.2 billion more and reduce the ships from 6 to 5..GENIUS’.Without any explanation and rational justification.That almost 1 billion missing from 6 billion paid didnt get mentioned much isnt it? Probably because that missing fund is for the 6th ship..LoL

  11. Menhan said it is cheaper to build 6 units instead of 5 because more quantity would certainly bring the cost down. But building a combat ship is not like buying a production car. There is no way to determine the actual cost until thr first unit is built & commissioned. Only then we can get the actual figure for one unit of LCS. But again, as Marhalim said i am too not confident the bill will stick at 11.2B.

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