PAC findings shows all five littoral combat ships will only be ready by 2029

KUALA LUMPUR, Oct 9 — The Parliamentary Public Accounts Committee (PAC) report on the littoral combat ship (LCS) revealed that the fifth vessel is estimated to be completed by 2029.

This timeline is an extension from the previously agreed completion date which is 2022.

“The LCS construction period has been extended to 83 months and it is expected that Royal Malaysian Navy (TLDM) will only be able to obtain all five LCSs in 2029 compared to the original contract where LCS 5 was supposed to be delivered in 2022,” the PAC said.

In the report, the PAC committee also found that the main issue of LCS’s detailed design has not yet been resolved which is currently at a rate of 96 per cent completion at the construction contractor level with only 84 per cent having gone through the confirmation, verification and approval stage by the Naval Group from France as the LCS design supervisor.

“However, the construction contractor assured that the detailed design must be completed before August 2024 as contained in the Sixth Supplementary Agreement (SA 6),” the PAC said.

On the reduced number of vessels, the government has decided to bring the number from six down to five since the LCS 6 has not started and the equipment that has been purchased could be used on the other LCS.

“Although the number of LCS was reduced to five, the cost of LCS construction increased from RM9.128 billion to RM11.22 billion with an increase of RM2.098 billion resulting from the cost of design (RM0.211 billion), the price of equipment (RM1.214 billion), insurance and risk (RM0.466 billion), financial costs (RM0.143 billion), project management costs (RM0.066 billion).

“Delays and extended time are also the main factors for this increase,” the PAC said.

Following its findings, the PAC, among others recommended for the Defence Ministry to ensure the implementation of the mobilisation plan according to the conditions that have been set with the first LCS ship to be completed in May 2024 and handed over to TLDM in August 2026.

“Defence Ministry needs to ensure that the contractor completes the detailed design including obtaining approval from the Naval Group before August 2024 as contained in the SA 6,” the PAC said.

At the same time, it added that the government must ensure the acquisition of Boustead Naval Shipyard (BNS) by Ocean Sunshine Bhd to achieve the original goal of its implementation.

On May 26, the government established a special purpose vehicle (SPV) to take over BNS Sdn Bhd, the company responsible for the LCS construction project, as a subsidiary.

Separately in a press conference today, Defence Minister Datuk Seri Mohamad Hasan has expressed confidence that the construction of the five vessels will be completed on track according to the newly agreed schedule.

“Building a ship is not easy, especially since this is concerning combat ships, which means there would be weapons installed on the vessels.

“Even a mere 0.01 per cent error could cause a big problem. After the construction is completed, we have to do a harbour test which will take about six months and after that, we need to go for an open sea test and that will take another few months,” he told reporters here at the Parliament building.