1 INTRODUCTION
The Malaysian government on Dec 2011 awarded Boustead Naval Shipyard a MYR$9.13 billion (US$2.1 billion) contract to build six second-generation patrol vessels with littoral combat ship capability for the RMN, (Asian Defence Journal).
CNA EXPLAINS What was revealed in the declassified reports on Malaysia's warship procurement scandal?
thediplomat on LCS launching
2 THE SHIPS ?
HISHAM: “first of six LCS to be delivered within two years”; it’s a ‘seasonal issue’.
“RMN’s ability to protect the country’s sovereignty” (Mymilitarytimes, 27th.August 2017).
3 THE SCANDAL
Mindef sided with BNS, not RMN
Vendors were chosen before Malaysian govt issued LOA
Why hasn’t anyone been charged directly in LCS scandal when authorities were aware of irregularities for past two years?
Former MD charged with three counts of CBT involving RM$21.08 million (only 0.23% of the total costs of RM$9.13 billion): Tan Sri Ahmad Ramli Mohd Nor - Boustead Naval Shipyard Sdn Bhd (BNS).
4 THE AGREEMENT
Boustead used LCS funds for another project to keep shared suppliers afloat ♤ The COVERUP ♤♤ The DUO LINKS
According to the declassified forensic audit report, Boustead Heavy Industries Corp Bhd (BHIC) issued 12 Letters of Award (LOAs) worth RM$3.3 billion to Contraves Advanced Devices Sdn Bhd (CAD) and its wholly-owned subsidiary Contraves Electrodynamics Sdn Bhd (CED).
The Rheinmetall company was once fined $46 million for bribery and a later scandal with India in 2018, too, according to the Sarawak Report.
Dummy payments, double claims and overlapping LOA caused BHIC to lose an estimated RM$890 million:
5 THE MIDDLEMEN
freemalaysiatoday: 3 firms used to siphon off millions
trail to millions of ringgit connected to three Singapore-based companies
RM192m diverted to fake companies
Firms belonging to minister’s wife ‘siphoned’ RM$243 million
6 THE PROBLEMS
manipulation by Boustead bigwigs ◇ Mindef, Boustead ignored navy’s views on LCS project
RM1.4bil of LCS allocation used for other purposes
RM890m losses due to management irregularities
Paper trail on LCS project destroyed by BNS officials
7 THE DESIGN
Design contract for LCS poorly negotiated
Letter from contractor led to design change
Human error led to costly LCS design contract
8 THE PROJECT
Zahid changed LCS design against RMN wishes
LCS project officers kept in the dark
RM$6.1 billion spent on 'bulk order'
9 THE LAUNCH
(LCS) launched in Lumut in 2017 was not a dummy…….
First Navy LCS wasn't even ready at the time of its launch
four LCS were at the 48%, 43%, 36% and 22% stage of completion; the fifth at 60% with fake mast; while LCS 6 has yet to start construction.
10 THE INVESTIGATIONS
A] PAC
B] JKSTUPKK declassified REPORT (pdf)
C] RAFIZI
D] SABRI
E] MUHYIDDIN
F] MACC :
several ‘individuals’ in LCS project be charged
G] ZAHID
"sila laksanakan" : next 1MDB
11 THE ISSUES
Aliran : Report on naval ships scandal must be fully declassified
C4center : LCS Fiasco - Defence Minister and Prime Minister at Point of Award must be Charged for such Grave Losses of Public Funds
SCMP : Ship scandal piles pressure on Malaysian politics
Sarawak Report : post-Sheraton, the new Defence Minister was Ismail Sabri who graduated to become PM whenupon he re-appointed Najib's cousin Hishamuddin Hussien as Defence Minister.
Asia Times : Najib-era ship scandal resurfaces to sink UMNO
ChannelNewsAsia : Proposal for Royal Commission to probe Malaysia's warship deal ...
FocusMalaysia : ongoing construction of the first littoral combat ship will not involve further new allocations from the Government ?
BNS sought additional RM$ 1.4billion
Malaysia’s Littoral Combat Ship (LCS) Project Delayed
Vibes: prosecute those involved, PAC urges MACC
Military Expenditure in Malaysia is expected to reach 3050.00 USD Million by the end of 2021, according to Trading Economics global macro models and analysts expectations. In the long-term, the Malaysia Military Expenditure is projected to trend around 3870.00 USD Million in 2022, according to recent econometric models:
The Malaysian government has proposed a 2022 defence budget of MYR$16.14 billion (USD3.9 billion) The allocation represents a 1.8% increase over the original allocation, according to Janes.
12 CONCLUSION
i) LCS combat system may be obsolete in 10 years
ii) still a long sail towards completion
iii) A RM$11 billion Scandal Now
iv) LITTORAL COMBAT SHIP PROJECT IN MALAYSIA CONTINUE ?
v) Malaysia’s maritime security challenges
vi) Malaysia’s approaches to the South China Sea
vii) Yew Meng Lai and Cheng-Chwee Kuik, Evolving Policy: Malaysian Diplomacy in the South China Sea
viii) Johan Saravanamuttu, Malaysia Policies and Interests in the South China Sea
VIEW RMN LCS Gowind-class video
LISTEN to these Podcasts:
Cynthia Gabriel [C4]
Dr Muhammad Mohan
Wong Kah Woh
LCS graphic templates adapted from BFM Explores
under
Creative Commons
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