In its report on the littoral combat ships last week, the Public Accounts Committee (PAC) had said BNS spent RM400 million to settle its debts from the new generational patrol vessel (NGPV) project.
Former defence minister Mohamad Sabu and his then deputy, Liew Chin Tong, maintained that none of the RM9 billion allocated for the LCS project should have been used for other purposes, claiming this was a criminal breach of trust.
“Did the sixth prime minister (Najib) award the LCS project via direct negotiations with the purpose of (helping BNS) pay off the NGPV debt?” they asked, citing how Najib greenlit the project as the prime minister then.
“Najib’s answer to this question will help us understand the problems surrounding the LCS project,” they said in a joint statement.
Mohamad and Liew also raised the spectre that the awarding of the LCS project to BNS may be linked to the NGPV project which involved the construction of 27 patrol vessels when Najib served as defence minister.
The NGPV project, which only saw six of the 27 vessels being completed, involved the privatisation of Naval Dockyard Sdn Bhd in 1995 under Najib’s watch.
They said Boustead Holdings Bhd then became the majority shareholder of PSC-Naval Dockyard, the company that came out of that privatisation exercise, which was renamed BNS in 2006 following Boustead’s takeover.
“The original contract for the procurement of NGPVs was signed by PSC-Naval Dockyard in September 1998 and was worth RM5.35 billion. The first additional contract was signed in December 2001 with no additional cost.
“After Boustead took over PSC-NDSB, a second additional contract worth RM1.4 billion was signed by BNS in January 2007, bringing the total value of the contract to RM6.75 billion.
“The basis of the RM1.4 billion increase was not clearly stated and no solid justifications were given,” the Amanah and DAP leaders said.
Mohamad and Liew said the PAC in 2005 held that the NGPV project was not managed well by the contractor and defence ministry.
Meanwhile, the auditor-general’s 2006 report said the NGPV project had many weaknesses because the government and defence ministry gave the contractor “too many chances” despite its financial and management issues.