SHAH ALAM: ISS contract to BDNC. Boustead Heavy Industries Corporation Bhd (BHIC) on June 16 announced its subsidiary company, Boustead DCNS Naval Corp Sdn Bhd (BDNC) was awarded a RM154.3mil contract from the Defence Ministry. BDNC — 60%-owned by BHIC’s unit BHIC Defence Technologies Sdn Bhd and 40%-owned by France’s Naval Group — received the letter of award for the In-Service Support for Prime Minister’s class submarines of the RMN.
The Bursa Malaysia announcement:
The Company wishes to announce that Boustead DCNS Naval Corporation Sdn. Bhd. (BDNC) had accepted a letter from the Ministry of Defence Malaysia (MINDEF) on 16 June 2020, awarding BDNC a contract for provision of In-Service Support for Prime Minister’s Class Submarines for the Royal Malaysian Navy (Contract). This Contract is for a period of one year starting 1 January 2020 at a contract value of RM154.3 million. A formal contract between MINDEF and BDNC will be signed at a later date.
BDNC is a joint venture company between BHIC Defence Technologies Sdn. Bhd. (60%), a wholly owned subsidiary of BHIC, and Naval Group (40%).
The Contract will contribute positively to BHIC Group’s current year earnings.
None of the directors or substantial shareholders of the Company, or persons connected with them, has any interest, direct or indirect, in the Contract.
The annnouncement came 11 days after BHIC announced that BDNC had been slapped with a claim liquidated damages from the Defence Ministry.
I am assuming that the contract was extended to allow for the support contract to continue as the ministry prepare the terms for a longer term contract, five years, which was supposed to be open to other bidders next year. The previous deputy Defence Minister had told Parliament last year that a closed request for bids was expected to be held in 2021.
A CGI of the LCS, a 3100 tonne Gowind frigate.
On June 10, BHIC also reported that it had posted a net profit in the first quarter of 2020. From the Edge.
Boustead Heavy Industries Corp Bhd (BHIC) returned to the black in the first quarter ended March 31, 2020 (1QFY20), boosted by defence-related maintenance, repair and overhaul (MRO) activities.
The heavy engineering services firm posted a net profit of RM20.38 million for the quarter, compared to a net loss of RM4.3 million for 1QFY19, and a net loss of RM118.6 million for 4QFY19.
From the BHIC Bursa announcement with heading Future Prospects:
The global economy has come almost to a virtual standstill as countries impose lockdown and movement restrictions to check the spread of the Covid-19 virus. This has impacted many businesses and industries, including in Malaysia where a Movement Control Order was introduced on 18 March 2020 and has been extended several times. This has caused a sharp drop in consumption and production, impediments along supply chains and disruption in trade. They inevitably combine to send the economy into a tailspin, with a recession on the cards.
However, recently the construction of the remaining three Littoral Mission Ships (“LMS”) in China hasresumed post Covid-19. Both the LCS and LMS Programmes are ongoing at slower progress. The Associate and China Shipbuilding & Offshore International Company had declared Force Majeure due to Chinese government lockdown of Wuhan city and was agreed by the Malaysian Government during Covid-19. Although work has partially resumed, the milestones of the project will have to be reviewed given the delay caused by the lockdown.
The Group’s joint venture undertaking MRO works on helicopters is performing better and the Group is confident in securing contracts in relation to aviation from the Malaysian Government. The Group will continue its pursuit of new markets while looking out for opportunities presented by RMN’s 15to5 Transformation Programme as well as the Defence White Paper released by Ministry of Defence Malaysia. Our Business Development team will step up efforts to look for commercial deals to diversify our earnings base and non-Government businesses within and beyond our core businesses
— Malaysian Defence
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View Comments (21)
If I'm not mistaken RMN want to set up major base in Bintulu, Sarawak past two years. How the progress of the project? Is it still on, and the construction already start or not?
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AFAIK no
Govt: "Here is your saman, and by the way we're going to give you another contract, so take it up the chin and pay us back. Thank you very much".
What the catch?
The RMN is enlarging their Sandakan base instead
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It was announced that they will be enlarging or building a new base in Sandakan but I think it will be like the Bintulu one, KIV. But I think both state governments will support both projects if funds are available now
Lots of stuff said about the LMS delay but nothing at all on the LCS delay🤐
anyway when is boustead is handing over their EC225LP for free to TUDM?? 🤣🤣🤣🤣🤣
On another topic, any details of the impending USA donation of AN/TPS-77MRR air surveillance radar?? Seems like this radar is a bit more capable than our current thales GM403, as it can be used for maritime surveillance too.
Already heard about the planned to set up major naval base (naval region) in Bintulu.
https://www.theborneopost.com/2018/03/08/navy-to-set-up-fourth-base-in-bintulu-rmn-chief/
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Yes,They even set up a project team in Bintulu but nothing significant until now
With change in government post GE-14, I suppose the Bintulu naval base project is permanently shelved?
There were also news of setting up a Marine Corps (more like a Marine regiment, or naval infantry), what's the outcome finally?
MMEA facebook page reported incident of Vietnamese fishermen encroaching into our waters and Vietnamese Fisheries Department trying to interfere with MMEA inspection of said boat. Warning shots were fired during the incident. So now not only we have to contend with Rohingyas and CCGs, we need to chase the Viets away too? What are they doing so far from their place?
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I think they are waiting for funding for RMK12 or 13 before development of the Bintulu naval base to begin.
The Marine Corps proposal was made by the Policy Division of the Defence Ministry during Hishammuddin Hussein tenure there. He spoke about it publicly without the plan being agreed upon with the military and even more importantly funded. Yes it was mentioned in the DWP but until funding is available it will be just that, plans. Vietnam fishermen has always been there in the SCS since the 1990s, they replaced the Thai ones
"Both LCS and LMS Programmes are ongoing at slower progress."
That is good enough. Back to business it seems.
No more 'one trillion debt' propaganda.
ZekMR "No more ‘one trillion debt’ propaganda."
Almost RM 0.8 trillion debt isn't much better. Adding federal government guaranteed debt, the amount is much above RM 1 trillion.
Marhalim "Vietnam fishermen has always been there in the SCS since the 1990s, they replaced the Thai ones"
What if we sold fishing rights to Vietnamese fishermen, and how much money would it take for us to upgrade our enforcement (in terms of MMEA's presence and the penalties for getting caught) to the point that it is cheaper for them to pay for the rights than to risk getting caught? How much money could we bring in and how much would we have to spend?
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Most of the encroachments were and are in the EEZ. Under international law we cannot impose levies on shipping activities in the EEZ or even in territorial waters so I guess we cannot also do that when in comes to fishing.