The anti-graft watchdog said there are several key governance and transparency issues related to the project which remain unanswered.
Apart from questioning the rationale for awarding the project to BNS in 2011 via direct negotiation, TI Malaysia president Muhammad Mohan asked if red flags were raised when BNS first indicated its inability to deliver the vessels within the original budget.
“What action was taken to address these red flags? Who was responsible for approving changes to the design specification from RMN’s (Royal Malaysian Navy) preferred LCS?,” he said in a statement today.
“Were there suspected kickbacks in how the contract negotiations were done and the final contract price determined?”
On Saturday, Prime Minister Anwar Ibrahim said the government had “no choice” but to take over BNS, failing which the billions of ringgit already spent on the LCS project would go to waste.
The first vessel was slated to be delivered in April 2019, but not a single ship has been delivered thus far.
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.
On Friday, BNS parent company Boustead Holdings Berhad (BHB) said the total cost of the project has been revised to RM11.2 billion.
In February, defence minister Mohamad Hasan 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.
“Anwar has repeatedly stated his firm commitment to fighting corruption and improving governance and integrity practice in the public sector,” Muhammad said.
“Ensuring the LCS project is not abandoned is important (and) holding those responsible for this problematic project accountable for their actions is vital.”
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