From P Ramasamy

The littoral combat ships (LCS) procurement project is not the first bailout and it certainly will not be the last in Malaysia.

The question is, however, will the injection of the RM4 billion rescue plan keep the LCS procurement project alive?

There have been countless government financial rescue operations in the past to resuscitate ailing Bumiputera companies and individuals.

I am not sure that government financial rescue operations have indeed succeeded in turning around companies in such circumstances.

Also, there has yet to be any major audit exercise in the form of a Royal Commission of Inquiry (RCI) to ascertain the financial and political viability of government rescue operations.

Also, such financial resuscitation measures that were undertaken in the past have been shrouded in mystery.

But only one thing is certain – the country’s 33 million people have been the losers in all this, not the political and financial elite.

Despite our colossal and shameful failures, the governments in charge have never learnt any valuable lessons from these man-made financial disasters.

On the contrary, there have only been more attempts at rescue operations to bail out those who are well-connected to those in power.

This is precisely what is happening now with the decision to inject RM4 billion to rescue the LCS procurement project.

This project was awarded to Boustead Naval Shipyard (BNS), where the majority shares are held by the Armed Forces Fund Board (LTAT).

The LCS procurement project was for the purchase of six naval patrol vessels.

However, the delivery of the first ship from France had been delayed for various reasons, mainly financial.

Despite the initial funding of RM6 billion for the LCS procurement project, BNS is in a deep financial mess.

If the government fails to inject the much needed RM4 billion to resuscitate the project, it would result in a colossal failure.

Defence minister Hishammuddin Hussein announced that the rescue package was to assist the 100 primarily Bumiputera vendors and at the same time continue with the modernisation process of the navy in the purchase of the six ships from France.

Hishammuddin has basically established the government’s two priorities as to why the LCS procurement project needs to be rescued.

The injection of the additional funds is not so much to continue with the project, but to rescue both BNS and the parent company LTAT, more than anything else.

Let alone the first ship that was supposed to have been delivered has yet to make its appearance in the country, now, I understand that the delivery date has been postponed indefinitely.

Even before the government could bail out BNS, there were a number of individuals involved in the procurement who were arrested.

However, they have yet be charged. In other words, something was really amiss with the LCS procurement project from the start.

So, why allow for additional funds when there was corruption and financial abuse involved.

No sane or responsible government would have gone for the additional injection of funds without getting the full benefit of a major audit.

Again, this present government, like the previous ones, has not learnt its lessons.

The decision-makers in the government should try to understand the reasons as to why the once strong Sri Lankan government collapsed under the weight of its self-inflicted wounds.

Malaysia might not be too far off from following the disastrous road travelled by Sri Lanka, thanks to the mess created by corruption and excessive bailouts of cronies.

P Ramasamy is Penang deputy chief minister II.

The views expressed are those of the writer and do not necessarily reflect those of FMT.