SHAH ALAM: Although her official handing over ceremonies were delayed twice – and many false starts – it appears MMEA first locally built OPV – KM Tun Fatimah/OPV1 – is already in its books. Malaysian Defence was told that the ship has been handed over to MMEA even without the official ceremony.
MMEA has not confirmed the handing over but on its Facebook page today, it reported that its deputy director-general (logistics) Vice Admiral (Maritime) Saiful Lizan Ibrahim visited the Kuching port to see the jetty where OPV1/Tun Fatimah will be based. The two Bagan Datuk class patrol boats –KM Sri Aman (4542) and KM Kota Kinabalu (4545) – and other MMEA boats, are berthed at the MMEA jetty at Muara Tebuas, some 25km away near the estuary to South China Sea.
As I mentioned before, the handing over – not the ceremony – was necessary due to variety of reasons, mostly due to legal issues. One might – the official handing over – laugh off such things as red tape etc but without it many things cannot be done.
For example, the Kuching port jetty where the ship will be berthing, MMEA needs to pay for the services. Without the ship being a government vessel under MMEA, the agency cannot pay for it.
Another issue will be the crew’s families. While the crew can travel to Sarawak on the boat, their families need to fly there, while their belongings need to be shipped there. Only – after the handing over is done – that these things could be taken care off.
It is the same when a new unit is stood up by the military. Only after the bureaucratic necessities are done, they could start working towards the new capability.
It is unclear when Tun Fatimah will sail to Kuching though. I believed it will be next year, which is just 11 days away. The ceremony to mark the handing over could be done in Kuching when she arrived there.
Do note, I am calling the ship Tun Fatimah, although MMEA has not officially call her that, as she is broadcasting the name on the AIS. Checks on the AIS showed that she remained at the THHE Fabricators yard in Pulau Indah where she had been based since her launch.
The MMEA jetty at Muara Tebuas is part of the agency’s headquarters in Sarawak which include an administration and sports complex as well as quarters for married personnel. It is likely that there is not enough quarters at the facility to accommodate the crew of OPV1/Tun Fatimah, hence the need to berth the ship at the Kuching port. The port is located near the Kuching suburbs allowing married crew to find housing facilities nearby. The bachelors will stay on board the ship.
*Updated with new information.
–Malaysian Defence.
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Yes the big question is will she still be Tun Fatimah when they officiate her into the fleet or something else.
A rose is still a rose no matter what is finally called. The bigger question whether the other two ships can be completed in the next 2 years or only become another malaysian shipbuilding rafflesia
Looks like MMEA Kuching jetty have to upgrade to avoid its vessel berthing at Kuching Port.
Don’t think they have money for that.
It all looks nice until one realise ship #2 & 3 hasnt even been joined their modules yet.
Has the financial issue of THHE been resolved so that those 2 can proceed? So many attention given to LCS that not many noticed this OPV is in the same shit.
From what I have heard, continuation of OPV2 and 3 will only be done once the issue of THHE liquidation is resolved and a new party steps in to continue the project.
With extra money like the Gagah?
Will MOF be stepping in to rescue them as well? I think eventually it will have to.
Of course, who else? We do not have billionaires who fund this kind of things. Anyhow, if I was, I also do not want to be involve in the rescue. I would prefer to donate a ship or two which I contracted out for myself instead of fixing the project.
Marhalim,
For sure extra money is needed. Nobody will want to step in knowing they will lose money.
Thought THHE is owned by the MOF Inc & MOF Inc is the one doing the winding down? No?
Forgive me but Im not aware if MOF will be doing so, as unlike LCS where an MOF SPAC will takeover BNS, there wasnt any word about THHEs fate. There was some news on TH restructure itself but not much news on subs ie THHE. Maybe, as I said before, there wasnt much political coins to gain so no much attention was given to THHE predicaments.
As for donations, be wary of billionaires (and oil sheikhs) bearing gifts. No deed comes without strings (or chain) attached.
Of course. The big question is whether THHE has been paid at least three quarters of the contract plus the loan earlier this year. With what had happened with the LCS, they may well be. I am guessing that to finish the two ships will be around RM200 million at least as from the pictures somewhere else – which I cannot verify – OPV 2 and OPV 3 looks the same as when I saw them in late 2019.
Yes it was the company which is owned by MOF Inc that had decided to liquidate itself. Likely under orders from their bosses.
The 3 OPV contract valued at RM740m. Govt provided THHE a RM150m loan. One wonders what happened to most of the original RM740m. I’m hoping the RM150m loan is for cashflow purposes as THHE is obviously not able to bill the government given the lack of progress with OPV2 and OPV3. Which means hopefully, at least half of the RM740m remains unutilised.
The last publicly available disclosure for THHE (FYE 31 December 2021) indicates overall project progress was 74% with OPV1 completed, OPV2 steel construction at 88%, and OPV3 steel construction at 43%. From the annual reports, we also see THHE’s Construction Services segment (where the OPV contract is captured) booked RM173m revenue between 2018 and 2021. THHE’s cumulative net operating cashflows between 2018 and 2021 is negative RM204m. Assuming 100% of THHE’s Trade and Other receivables are paid without impairments, how much of the RM740m is left may depend on the amount covered under government furnished equipment.
Once again, just as with LCS project, I suspect it was a matter of insufficient budget. The original tender called for 740mil for 2 ships but the then Govt was so proud to announce they (not the builder) had managed to squeeze another boat in which started a lot of alarm bells ringing in my head. True enough the company became insolvent.
Best case scenario is govt to put in another 150 mil for the next company to finiah opv 2 in 2 years time.Opv 3 is a gone case
Yes thats my concern too..Govt better not paying them lumpsum like they did with that LCS..740m original contract..About 247m pership..Still 4 years late in my book..original proposed handover date of OPV1 was feb 2020 then covid happen
The company was insolvent when they got the contract as the offshore project contracts had dried up. It was hoped that the project will give them funds and experience so they can start building more ships as that point they have never build any ships. But then the PH government ensure that the company can no longer have bridging funds/loans from TH by moving it into a MOF Inc company.
Good move, as TH was already reeling from bad investments by its subsidiaries. Too bad the move kills THHE.
The OPV project it seems was meant to ‘rescue’ THHE then as they were facing insolvency and that wouldnt sit well with the TH millions of contributors. As with LCS I suspect Najib Administration would have quietly issued supplementary budgets to pad up the OPV losses of monies to be used to cover up TH losses. Obviously PH didnt want play this game.
THHE kaput due to losing the court case to GMOS for the ill fated FPSO project. Hit with RM 200 mil+. No way for UJSB to swallow this, thus close shop. THHE was awarded the OPV mainly due to the issues brought about from this FPSO project and ultimately closed shop because of it as well. I believe work on OPV2 and 3 would have continued after the MOF 150mil loan (with the yard as collateral) was obtained but the court judgment came soon after the loan arrangement was cleared and scuttled the whole project.
@ api69
So the OPV was just a collateral damage because of something not related at all to the project, but everything to do with how the THHE management not competent enough to handle the risks of its other contracts, compromising the entire company.
Hopefully something can be done like the TLDM Training ships fiasco, the government taking full ownership of OPV2 ad OPV3, and pass all the hardware to another company to complete them.
@hulubalang
Yeah, sad but true. The issues created by the past management killed the company and the project. Another company has to come in now to complete the project. Depends on how the liquidation is resolved though, as ownership of the yard is paramount in deciding how to complete the project. Unlike the Training Ships, both of which were afloat and easily moved, OPV2 and 3 are in blocks and/or in pieces.
THHE hit by FPSO failure. BNS/BHIC hit by BPS failure.
Our defence programs are in jeopardy because other nondefence FUBAR taking it along. Govt had no business doing business after so many many strings of failures and this by Api69 is just one of them, sadly as usual no one will be punished for it. Thanks for sharing.
@ Api69
The land that THHE sits on is probably one of the biggest assets. It is right beside TLDM KD Sultan Abdul Aziz Shah, the hydrography center. It would make a good site for APMM base.
But KDN, which APMM is under. How high priority is APMM when the minister has not even commented on other things under KDN like the immigration crisis, police integrity etc? Do the OPV issue even looked at by KDN and put serious manpower resources into it, like how MINDEF handled the LCS issue?
Anyway on the OPV2 & OPV3. Options
1) the nearest is to get all the pieces to Muhibbah Engineering Shipyard, just 3-4km away from THHE site.
2) As most of the hull steel components are in pieces, it can be put on a barge, and sent to any other shipyards to complete. it can even be OPV2 at shipyard A, and OPV3 at shipyard B. To really make sure it is completed, send to MMHE Pasir Gudang (a it is a Petronas owned and managed company, and made the TLDM OPV KD Marikh in the past). Or wanna be inclusive, send to shipyards in east malaysia? why not?
3) Continue building the hull on site to floating status. Then tow it to another shipyard for fitting out.