The LCS project, said to be the largest defence procurement in Malaysia’s history with a total cost of RM9 billion, came under intense scrutiny last year after the Public Accounts Committee (PAC) revealed that not one of the six ships had been completed although Putrajaya had already paid out RM6.08 billion.
BNS is a subsidiary of Boustead Heavy Industries Corporation Bhd (BHIC), a unit of Boustead Holdings Bhd.
The majority shareholder of Boustead Holdings is Lembaga Tabung Angkatan Tentera (LTAT), the armed forces pension fund. LTAT is a statutory body under the purview of the defence ministry.
In a Bernama report today, defence minister Mohamad Hasan said that despite the finance ministry having taken over the LCS project, it will still be overseen by a project monitoring committee jointly chaired by the secretaries-general of the Treasury and defence ministry.
“In addition, periodic reports will be prepared and submitted to the Cabinet in accordance with the conditions set by the Auditor-General,” he told reporters after signing the sixth additional contract between Mindef and BNS today.
Last year, PAC reported that the navy should have received five of the six ships by August 2022.
In a statement last week, PAC said that it intends to hold fresh proceedings into the LCS project in the current Dewan Rakyat meeting.
The new PAC chairman, Mas Ermieyati Samsudin, said the first proceeding will cover the progress of LCS’ construction from last October to this month.
In response, Mohamad said the PAC is welcome to monitor the progress of the ship’s construction and will receive reports on the matter.
He also called for the PAC to present reports on the LCS’ construction to the Dewan Rakyat if they were not satisfied with its progress.
“Periodic reporting to the Dewan Rakyat through the PAC will be done at least once every three months to ensure that the project can be monitored by all parties,” he said.
“This is necessary for us to achieve our aim of continuing the LCS’ construction as required by the navy and the armed forces.”
In February, Mohamad said the cost of the LCS project will remain the same despite the navy set to receive five ships instead of the original six as the price of building ships had increased due to the many variations from the original order and inflation.