SHAH ALAM: Back in August, Malaysian Defence reported that the MMEA’s OPV1 – OPV Tun Fatimah – will be delivered by year end. This was even though the plan was for her to be delivered by October or November. MMEA DG Admiral Maritime Abdul Hamid Amin speaking on November 11 announced that the handing over will take place on November 27.
Unfortunately, I was told that this was not the case as the handing over ceremony today was scrubbed after OPV1 suffered a glitch last week.
The matter was rectified quickly, I was told, but it was enough for the handing over to be delayed to mid-December. For the record, OPV1 was on contract to be delivered in August 2022. Checks on ship trackers today showed Tun Fatimah remained at the TH Heavy Engineering (THHE) jetty adjacent to the shipyard. She was on trials within the last two months.
Anyhow, what about OPV 2 and OPV 3 then? I was told that their completion and deliveries are in limbo as THHE has been wound up. From the Edge:
KUALA LUMPUR (Sept 13): Offshore fabricator and shipbuilder TH Heavy Engineering Bhd (THHE) is undertaking a voluntary winding-up, a year after it was delisted from Bursa Malaysia.
The company resolved to undertake voluntary winding-up as it is unable to continue its operations due to liabilities, it said in a winding-up notice dated Sept 13.
The winding-up notice also stated that a meeting of creditors is scheduled for Oct 4 at 3pm.
THHE is controlled by the Ministry of Finance-owned (MoF) unit Urusharta Jamaah Sdn Bhd, which holds a 64.45% stake in the company prior to its delisting on Sept 5, 2022.
As of March 23, 2022, other shareholders include Mohamed Faroz Mohamed Jakel and siblings Luqman and Mohamed Nizam who collectively held 2.95%, according to THHE’s last annual report.
As at end-June 2022, THHE had capital deficiency of RM210.87 million, as it had RM393.14 million in total liabilities, against RM182.27 million in total assets.
This was the same scenario which befell the RMN training ships back in 2015. Both ships were finally completed at the Grade One Marine Shipyard in Lumut, Perak and commissioned into the RMN in 2018.
It must be noted that both KD Teguh Samudera and KD Gagah Samudera had already been launched when the shipyard was wound-up by its creditors. I was told OPV2 and OPV3 blocks have been built but they are not yet joint. (I was told of recent pictures of the OPV 2 and OPV3 under construction at the THHE shipyard but they looked the same as when I saw them in 2019).
I was told the Home Ministry and Urus Harta Jemaah (the MOF-owned company which took over THHE during the PH government rule) were trying to ensure that the OPV2 and OPV 3 could be completed. But it will take some time based on the training ships saga. Hopefully, Urus Harta had ring fenced OPV2 and OPV3 when it voluntarily wound-up THHE so there is no need for them to get a court order to do it (which will take time).
Even if they got the legal order to complete the ships, it is unclear whether the work to complete them could be done at THHE yard in Pulau Indah or it need to be done elsewhere like the two Samudera.
I am not a lawyer but based on the Edge report above, the government may well have to pay TH Heavy Engineering’s liabilities of around RM393.14 million as the company has no income. And this is on top of the RM738.9 million contract to build the three OPV was secured by THHE in January 2017. I am not sure whether the government has paid THHE the whole amount though.
The government also extended a loan of RM152.6 million to THHE early this year to ensure the completion of OPV1 within this year. The money was supposed to be enough to complete the OPV2 and OPV3 as well, Malaysian Defence had reported.
THHE travails is probably the reason MMEA had to accept offers of retired ships.
— Malaysian Defence
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View Comments (27)
Another disappointment...what a waste of time and money
What could have happened is that the government only paid for the 1st ship in full from the total of RM738.9 mil contract. The loan of RM152.6 mil is probably paying off material and hardwares already sent by suppliers to THHE but not yet pass completed milestone to be considered as can be paid by government.
So i think most of the RM393 mil is basically what is not paid yet by government (as the 2nd & 3rd ship is nowehere near complete) inclusive of the RM52.6 mil government loan.
So who can complete the rest of the ships? I would say MMHE (Petronas), the 2nd OPV built onsite to floating condition and towed to pasir gudang, and the 3rd ship to be built in Pasir gudang...
AFAIK, the RM393 million is debt not paid by THHE from its contractors for work on offshore projects and got nothing to do with the OPV project. The debt mushroomed following the collapsed of oil prices starting in 2014. The Najib administration gave the project to THHE as financial support for the company as it was one of TH subsidiaries then. One of my schoolmates worked in one of the those companies. He told that the company principals, from overseas, cannot believed that the people was part of the Pilgrimage Board
So nobody will be held accountable as usual?
These losses are why mnay of haj pilgrims now has to pay in full
Dont give him the pardon.
This is preposterous. With this failure , each n every ship building project for our navy n mmea has ended in failure. Will LMS n LCS batch 2 be heading in thevsame direction?. Its like throwing money into the ocean.
More importantly, the defence n secirity of the nation has been seriously compromised
I think mmea and tldm shld buy 6 victory class korvet and 4 sentinel class korvet and 4 endurant class lpd from Sg.
Sg maybe give away free.
Sg need strong mmea and tldm for peace in Asean. Not like this..
Malaysia need strong mmea and tldm for malaysia.
But looks like many doesn't even believe that it can be done.
Yes lots of past and present mistakes needs to be corrected, but if there is a will, it is within our capability and resources to get it done.
... - ''… – ”But looks like many doesn’t even believe that it can be done.” Who are the ”many’?
Actually, if you take the time to think; most agree with the ”Malaysia need strong mmea and tldm for malaysia” [your quote] but disagree with notions that the needs of both entities should be conflated …'
... - ''Yes lots of past and present mistakes needs to be corrected''
Correction, a new revamped holistic policy is needed.
... ''if there is a will, it is within our capability and resources to get it done.'''
Sound like a motivational guru at one of those talks where at the end all get up sing and hold hands. It's not ''will''; we have the ''will'' to do many things but see how they panned out.
Dont give him the pardon.(Marhalim Abas)
Hahahaha hahahaha hahahaha!
I can't say more. What's the use when we have shitheads in our MinDef and KDN. Ah yes, censorship etcetera so none dare criticize the regime of the day.
Am getting another Livita from the fridge.
A glitch which hopefully wont last for 3 years yeah. Otherwise it is a real FUBAR.
OPV1 being painted and looking almost ready is just smoke & mirrors with OPV2 and OPV3 yet to even join their hull modules the program is so way behind schedule yet nobody seemed bothered and all attention & endless RCIs / PAC reports goes to LCS.
"Correction, a new revamped holistic policy is needed."
Easier said than done. When the whole Msia is rotten to the core there is no permanent solution by fixing certain parts. This is about correcting the 3R, NEP, patronage & politics, education, governance, how we elect our reps/MPs, & society as a whole. To really fix it, Msia must be fixed from top to bottom, the country, the government & the people.
“Easier said than done”
Never said it was “easy”; only what was needed for things to be done differently.
“To really fix it, Msia must be fixed”
As I’ve said before; the defence sector is a reflection of various things which have gone horribly wrong in this country.