SHAH ALAM: TH Heavy in a pickle. If you read the local business pages, you will be aware that TH Heavy Engineering (THHE) Sdn Bhd, is likely to be delisted from Bursa Malaysia. In fact the shares of THHE have been suspended from the Bursa since December 10. It would have been delisted on December 14 if the company had not appealed the decision.
Bursa announced the decision to delist THHE on December 1, this year. So what is this got to do with Malaysian Defence then? If you have a slight interest in Malaysian Defence you will know that THHE is the builder for Malaysian Maritime Enforcement Agency (MMEA/APMM) three OPVs. It was building the three ships under the THHE/Destini JV which broke up earlier this year. The JV got the contract to build the three OPVs in 2017 and until now none of the ships have been launched. It must be noted that the Pakistani Navy has commissioned two corvettes, a slightly larger version of the MMEA’s OPV, in 2020. Contracts for both ships were also signed in 2017.
So what if THHE is delisted from Bursa Malaysia? According to the Edge it its on the brink, really. With multiple creditors on its back and not much revenue coming in apart from the money due from the government when the three OPVs are commissioned into service. Whether it will get there or not is another issue.
It is interesting to note that the Defence Ministry had sought to ensure that the LCS hulls and its equipment stored at the Boustead Naval Shipyard in Lumut is protected from the company’s creditors. One have to wonder whether the Home Ministry had done the same for the MMEA OPV? Of course if indeed the creditors take over possession of the THHE Fabricators yard in Pulau Indah, Port Klang, it will take some time for the government to take back the ships and all of the associated equipment. Just like what had happened with the RMN training ships.
I have been told that the first MMEA OPV – Tun Fatimah – is ready to be launched at any time. However the ship cannot be launched until JV buy out is officially completed. Therefore it is unlikely that the ship will be delivered to the MMEA this February as stated in the revised contract. Of course she could be launched within the next 70 days or so, but delivery is likely to take place by June at the earliest, if we are lucky of course.
It is interesting to note that on December 7, THHE announced it signed a MOU with APO Integrated Services Sdn Bhd, the local representative of Liren Marine Technology Co Ltd, for a JV to jointly bid for the construction of eight units of RMN’s Second Batch Littoral Mission Ship project. The fact that THHE had signed a MOU with a local company which acted as an agent for a China shipping company instead directly with a shipbuilder from China, speaks for itself.
— Malaysian Defence
View Comments (32)
If not mistaken, previously THHE & Destini worked with Damen for the proposal of 2nd Batch LMS right? The next stupid thing that we need is another batch of Chinese built/designed/equipped LMS.
Incidentally just a few weeks ago the second of Philippines Coast Guard 94m MRRV/OPV was launched by Japan. The contract was signed in February 2020 costing a total of 132.57 million dollars for the 2 ships. That is less than 2 years from contract to launch of all 2 OPVs.
Philippines also has just approved the downpayment for 2 new South Korean Missile Corvettes, which is as big as our Maharajalela Frigates. By the looks of it, even these still unbuilt warships will be completed and be in the water before any of our Maharajalelas will.
http://pbs.twimg.com/media/FD7FXQ4VEAEoXXi.jpg
luqman - ''The next stupid thing that we need is another batch of Chinese built/designed/equipped LMS.''
It certainly won't be Chinese built but Chinse designed. Nothing wrong as long as the RMN has a say in it's design [without the local industry or anyone else dictating things] and as long as from the onset it's not equipped with Chinese gear which is incompatible with what we already have and would make it highly problematic and expensive to integrate with non Chinse gear.
Why don't the government just not procure any more major naval systems from local industry and companies. Lets just leave the ship building to their respective Ship Designers and Makers. The LCS should've been built by Naval Group themselves in France and these OPVs should've been built by Damen in Denmark itself, end of discussion. Malaysia cannot sustain a naval defence industry due to lack of activity, talent and demand. Local companies should only be involved in Maintenance and after service.
Damen is from Holland
Firdaus - ''Why don’t the government just not procure any more major naval systems from local industry and companies.''
This is a question which has been done to death with. It's because under Mahathir we came up with a policy of ensuring that big ticket purchases must benefit the country as a whole; not just the armed services and foreign suppliers. The idea being that ToTs, offsets and local production would not only benefit the defence industry but also other industries and that jobs would be created and that the technology we gained would lead to long term tangible benefits.
With the NGOPV and LCS programme the idea was that the the local industry would learn and eventually be able to built its own ships without or with minimal foreign assistance [the ''self sufficiency'' myth that some still go for], that jobs would be created, that the amount of local content could be gradually increased and that some of the money allocated could be diverted back into the local economy.
So goes the theory ..... In reality we have long found ourselves in a highly destructive and self defeating situation in which the local industry takes precedence over the services and the taxpayer; we end up paying more than what we should or could have, we have a MAF whose capabilities don't reflect what we've spent on it and we have a MAF with a bit but mot enough of anything. On top of that defence is not something we take seriously.
Firdaus - '' Malaysia cannot sustain a naval defence industry due to lack of activity, talent and demand.''
Because of the lack of a holistic and apolitical policy; no continuity; no economics of scale; politicians and a public which don't take defence seriously, a lack of funding and shifting priorities.
why don't we just said the obvious thing that due to this cronies,these type of project will never be completed
6 lcs & 3 opv delayed, corruption and bad management. Safe to say our industries are still not ready to be conducting huge projects like these. Should've let overseas companies built it.
Oh not again. All ship contracts for Malaysian companies went kaput
What happens to LCS?
Still waiting for the minister to push for it to the Finance Minister. Probably he is still looking at the proposal even though the previous minister, the current PM, had done the leg work
Abdul - '' obvious thing that due to this cronies,these type of project will never be completed''
Incorrect.... It's because of a highly flawed and self defeating policy which is aimed at national interests rather than the end user or taxpayer. ''Cronies'' or rather the local industry are a problem because we made it into one as part of our short sighted policy ......