Hishammuddin should explain why the Defence Ministry has reduced from two LCS to one LCS which must be completed and delivered with no additional government funds

Defence Minister Hishammuddin Hussein said yesterday that ongoing construction of the first littoral combatant ship (LCS 1) will not involve new allocations from the government.

Hishammuddin said additional allocations for Boustead Naval Shipyard (BNS) to complete the remaining five LCS will only be considered after completion of LCS 1 in reportedly another two years, despite an initial targeted date in 2019.

Hishammuddin should explain why the Defence Ministry has reduced from two LCS to one LCS which must be completed and delivered by the contractor with no additional government funds.

When Hishammuddin appeared before the Public Accounts Committee on 25th January 2022, he spoke about “corporate restructuring” of the RM9 billion LCS contract and that the contractor, BNS, will have to deliver two LCS without any new cost to the government.

This is what Hishammuddin said in January 2022: “They (BNS) will not get any more money from the government until these two ships have been delivered.” (page 4 of Hansard).

Hishammuddin also said: “…if we want to proceed, we cannot put all the money upfront if Boustead doesn’t commit to being able to deliver at least two ships” and “This is the only option I have. If I am wrong or is not enough, then I don’t have any other ideas to propose. You got to find a new Defence Minister lah” in his appearance before the PAC meeting on 25th January 2022.

The Defence Minister should explain why in three short months, he has reduced from two LCS to one LCS which must be completed by the contractor with no additional government funds.

I commend Hishammuddin for the release of declassified report of the governance, procurement and finance investigation committee’s (JKSTUPKK) on the Royal Malaysian Navy’s littoral combat ship (LCS) project and his taking up of the issue of a Royal Commission of Inquiry (RCI) into the RM9 billion LCS scandal at the Cabinet yesterday.

As the PAC Chairman, Wong Koh Woh has said the JKSTUPKK report should have been released without any redaction, and I call on Hishammuddin to have a special secret session with all Member of Parliament on the redacted parts of the JKSTUPKK report as well as to explain the Defence Ministry’s plans on the six LCS.

Hishammuddin should be aware that he is Defence Minister and not a postman, and although he had kept his promise to the Dewan Negara on Tuesday to bring the suggestion of a RCI on the LCS issue to the Cabinet, Malaysians expect the Cabinet to establish the RCI and not just for the Defence Minister to act as postman.

As I said yesterday, Hishammuddin should resign as Minister of Defence if he cannot convince the Cabinet to set up a RCI into the RM9 billion LCS scandal, as it would show that his views and proposals as Defence Minister on defence matters are utterly irrelevant and not taken seriously by other Ministers in the Cabinet.

I have given 20 reasons why there should be a RCI on the RM9 billion LCS scandal.

The 21st reason is the JKSTUPKK report itself, even with the redactions.

In fact, the JKSTUPKK report has achieved multiple objectives. It is the answer to the challenge by former Prime Minister Najib Razak to those blaming him for the failed LCS procurement that he must take responsibility for the LCS scandal, as the LCS history went as far back as 2007 when Najib was the Defence Minister.

It also proved that the UMNO President and the former Deputy Prime Minister, Ahmad Zahid Hamidi, was lying when he said it was unreasonable to pin the failure of the LCS procurement on him as he was not the defence minister when the project was awarded.

The JKSTUPKK report is proof that it was Zahid who overturned in July 2011 the decision recommended by the Royal Malaysian Navy to contract six Dutch-made Sigma LCS and chose the Scorpene manufacturer’s six French-made Gowind LCS without consulting the Navy, the end-user.

What more has Zahid got to say now.

Zahid should explain why it took nearly a year from October 2009 to May 2010 and six meetings with the Royal Malaysian Navy on the RMN’s recommendation to procure the Sigma LCS with the Defence Minister giving final approval on 26th May 2011 for the Sigma procurement, and why the decision was overturned in three days on 11th July 2011 because of the representation of the contractor, without consulting the RMN?

Was the decision to procure the Gowind LCS decided by Najib from the very beginning with Zahid’s knowledge – which meant that the nearly year-long six meetings between the RMN and the Defence Ministry on the RMN’s recommendation for the Sigma LCS from October 2009 to May 2010, leading to Zahid as the Defence Minister giving final approval on 26th May 2011 for the Sigma LCS procurement, were pure charade and the RMN’s views were utterly irrelevant and inconsequential?

The answer could only be found with the establishment of a RCI into the RM9 billion LCS scandal.

I have observed that the three charges against former Boustead Heavy Industries Corp Bhd managing director Tan Sri Ahmad Ramli Mohd Nor on Monday had nothing to do with the LCS scandal.

All the three charges against Ramli were before the issue of the LOA (Letter of Award) for the LCS procurement which were issued on 16th December 2011.

As the three charges against Ramli pre-date the issue of LOA for the LCS procurement , which meant they related to other defence procurement scandals, the Malaysian Anti-Corruption Commission (MACC) should explain why after 10 years, the MACC has failed to prefer a single charge against anyone for the RM9 billion LCS scandal.

No wonder Malaysia is rated in the low category of the high-risk corruption of D group of countries in Transparency International’s Government Defence Integrity (GDI) Index for corruption in the defence sector, for there are many other defence acquisitions in Malaysia mired in corruption, malpractices and abuses of power, like the theft of two engines of F5 fighter jets, Scorpene and Agosta submarines scandal, the crash of RMAF aircrafts, the four-year delay in the delivery of six “Little Birds” helicopters, only four of the 28 Russian-made fighter jets able to fly and other horror stories of defence procurement in Malaysia involving millions or billions of ringgit.

An accounting from MACC is called for.