Lcs Project Downsized Cost Increased To Rm11 2b


 


Putrajaya has inked a new deal with Boustead Naval Shipyard Sdn Bhd (BNS) that will resume the long-stalled littoral combat ship (LCS) project.
According to parent company Boustead Holding’s filing to Bursa Malaysia today, the sixth supplemental contract signed today will require its subsidiary Boustead Naval Shipyard (BNS) to deliver five LCS instead of six.
The total contract price has been revised to RM11.2 billion, up from RM9 billion previously. The government has already disbursed RM6 billion.
In a statement, Boustead Holdings chairperson Nazim Rahman said this agreement resulted from the thorough review of multiple options and all aspects of the project by the company and the government.
“Under this new agreement, various preventative measures have been put in place to ensure that the ships will be delivered on time and within the allocated budget.
“This includes the formation of a project monitoring committee, co-chaired by the secretary-general of treasury and secretary-general of the Defence Ministry, to strengthen the execution and supervision of the project delivery hence ensuring the failures of the past do not happen again," said Nazim.
He said new management has been put in place at BNS, Boustead Heavy Industries Corporation Berhad (BHIC), and Boustead Holdings at Armed Forces Fund Board (LTAT), which has allowed the company and its shareholders to take an objective assessment of the project and the best way forward to complete the delivery of the ships.
The LCS project began in 2013 but after RM6 billion was spent, BNS missed the 2019 deadline to deliver the first ship.
As of last year, construction of the sixth vessel has yet to begin and none of the vessels has progressed beyond the 50 percent mark.
A Public Accounts Committee (PAC) probe on the matter revealed that the navy’s requirement for the project was ignored by the government and due diligence had failed to establish BNS’ financial difficulties. - Mkini


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