SHAH ALAM: Abandon ship, scrap the LCS Part II. The forensic report on the LCS programme, first made public in the Public Accounts Committee (PAC) report was declassified yesterday. The declassified report is published on the Parlimen website.
You can go to the website above to read the whole report for yourself or you can go here to take a news report on it. There is no need to guess who were involved as it is likely the people will be formally identified (or charged themselves) when the CBT case against the former MD of Boustead Heavy Industries Corporation (BHIC) and Boustead Naval Shipyard goes to the trial stage.
Anyhow just like the other declassified report, this one also confirmed my believe that it is better to scrap the LCS project altogether and start anew, even with the LMS Batch II as a starting point. It will not replace the LCS of course but as I said earlier it will give us at least, its cost and timelines for delivery and commissioning.
If the JKSTUPKK report, had not convinced you that the LCS project is not worth saving, the declassified forensic report – although already excerpted in the PAC – will surely do it.
The forensic report alleged that officials of five companies – DCNS; MTU; CentraalStaal; Contraves Advanced Devices Sdn Bhd and Contraves Electrodynamics Sdn Bhd – involved in the LCS had colluded with officials of BHIC and BNS in financial shenanigans resulting in massive money drain and raising costs for the whole project.
It is likely that these shenanigans (whether BNS can deduct payments and take action against these officials, though its hand is weak as it happened due to its own officials involvement) will be a major contentious point during negotiations for the resumption of the LCS project and its delivery deadline in 2025. Their involvement in the project (four of them) is paramount that if they decided to withdraw completely, BNS is – for the lack of a better word – will be hanging in the air. (despite what the LTAT CEO has to say about it).
It is likely that the government will not abandon the LCS project, though. They will talk about companies and workers losing their income. It must be noted that most of the workers involved in the LCS project, especially those working with the sub-contractors have already been laid off as early as November 2019. Many will be wary to return their old jobs especially now. Again, it will be better for the government to pay off BNS debts and abandon the project altogether. It will be black mark as they will be spending at least RM11 billion with no ships in hand now than waiting for another two years for the same result. But of course, it will be a problem for the next guy.
— Malaysian Defence
View Comments (27)
Humbly disagree here as we have already went this far. What we should do is go back to the revival plan and get NAVAL to takeover the project continuation (that was part of the revival proposal but not selected).
https://www.malaysiandefence.com/options-two-and-three-for-lcs/
If its the case of simply lacking money to complete the project as BNS ascertained https://www.malaysiandefence.com/show-me-the-money/
Then the issue here is just money but if that is not the issue then BNS should also be sued for fraud as they had mislead the Cabinet in approving said plans to continue with BNS (Option2) rather than with NAVAL (Option1).
Ultimately this is a highpoint as previously it was believed that Government would not sue a GLC but it would seem this LCS case will break that assumption.
Naval is named in the report by its old name, DCNS
So scrap is better than saving it then. If that's what the majority consensus are, why still want to save the cursed project though? Also, why the Navy also doesn't want this project to be scrap and made a new one?
Unfortunately Marhalim, the government will still continue to finish at least 2 of those ships. Yes I do agree that scrapping the LCS project and save rm5 billion or whatever amount left needed to complete the 6 LCS to be used to buy LCS of different design or use it to buy LMS Batch 2 using parts from LCS immediately. But sadly that is not what the government want due to of course saving face, saving jobs for whatever people that is left (I guess most of the BNS workers already been laid off and maybe found other jobs), saving the funds of our beloved retired soldiers savings in LTAT so and so forth and what not.
I still stand in support of scrapping the LCS altogether and go for plan B.
They have to follow the government wishes
Yes I meant them (NAVAL/DCNS) since they are the OEM after all.
@Akmal
Despite preference for another ship design and all that has happen, TLDM would still prefer to stick with this project if it meant getting those ships, unless there is concrete commitment from the Government to start getting replacement ships and preferably back to the original design they wanted (ie Damen). If that were to happen expect another RM 11-15Bil more and another 3 years (at least) since we'd have to start from scratch.
For the record, the report released was only for financial year from 2011 to 2014 and already found many hidden skeletons inside BNS cupboard. Not to mention financial years of 2015 until 2018. I am sure many more will be found. The equipments purchased are not all paid for because some of it are on credits. Maybe BNS can negotiate to return the unpaid one. I am sure during this process an overseer must be appointed to makesure all the expensive equipments are accounted for. BNS should be put under management of the insolvency dept just to find way how to pay their debts. Building the ship is out of the question as it is clear as crystal that they dont have the know-how and know-why for such complex project as the SGPV. Another option is to get Naval Group to build a baseline gowind FFBNW. This is where the programme is heading. H2O said no further funding will be allocated for the first ship. And i doubt BNS can complete it without the money. Adios amigos, sayonara scrap the project & dissolved BNS assets to cover losses.
It will require more than RM3b to finish the first ship. The final tranche of RM3b for the LCS is for work already done, not for new work. If the government doesn't increase the ceiling there is no LCS. The problem is, no one knows how much will be needed to finish 1the first 2 ships. So having spent RM9b, technically, based on the PAC report, as of October 2020, LCS1 and LCS2 are only 64% and 60% completed. Even if the government increases the funding, work hasn't resumed as of August 2022, and there is no detailed design to complete the ships. Collectively this means the 2025 delivery is probably impossible. In conclusion we have 2 problems, 1) don't know how much it will cost for first 2 ships, and 2) don't know when it will be delivered. With the parameters, people should decide how best to allocate extremely valuable shipbuilding funds. Concurrently, be mindful that the entire defence budget is shared with the Army and AirForce, both of which have their own programs to fund. The decision to stay the course to finish all 6xLCS is still a decision, but must come with a new approach and additional funding. The decision to scrap the program and write-off RM9b is still a decision, but must come with a Plan B. Either way, things move forward, instead of the current limbo.
Errata. I stand corrected, the actual progress of LCS1 and LCS2 is actually 44% and 35%. But payment is 64% and 60%.
@Qamarul
BNS had the knowhow and know why to build such high tech ships, they just don't have the knowhow and know why to DESIGN such high tech ships. Different things.