One of the takeaways from the Public Accounts Committee’s (PAC) investigations into the Littoral Combat Ship (LCS) scandal is that a civilian – a politician, but a civilian nonetheless, an individual who had probably never operated or sailed a watercraft in the open seas by himself for a day in his life – seems to know more about naval warfare and combat ships than the 89-year-old Royal Malaysian Navy.
The Malaysian Armed Forces has existed for 90 years. Its core business is to maintain peace and security during peacetime, and to provide the offensive counterpunch against a potential aggressor during war.
It stands to reason that when it comes to picking the right weapons systems and platforms to get the job done, they know what they’re talking about.
The LCS, or the Maharajalela-class programme, is the lynchpin of the RMN’s “15-to-5” initiative to streamline operations and improve combat efficiencies. The six stealth frigates are the cornerstone of that force.
In early 2011, Malaysia announced its Second-Generation Patrol Vessel programme (which morphed into the LCS), with an initial budget of RM6 billion.
Later that year, it was announced that the Gowind-class had been selected, and that the contract had been awarded to Boustead Heavy Industries Corporation (BHIC).
It later emerged that the RMN had originally picked the Sigma-class (Design 10514) by Damen Schelde Naval Shipbuilding from the Netherlands.
However, this was allegedly overruled by the then defence minister, Datuk Seri Ahmad Zahid Hamidi, at the request of BNS, and without referring to the end user, the RMN.
The PAC report on the scandal quoted Guna Aruralan David, the deputy chief secretary of the special investigation committee on governance, acquisition, and finance, who testified that: “On May 26, 2011, minister Dato’ Seri Dr Ahmad Zahid bin Hamidi concurred with the RMN’s choice of the Sigma design (from Damen Group), and the Combat Management System from Palais, France.”
“However, on July 11, 2011, Dato’ Seri Dr Ahmad Zahid bin Hamidi changed it to the Gowind design (from Naval Group France). On Sept 26, 2011, the Combat Management System was also changed to the Setis system, from France. Both recommendations came from BNS (Boustead Naval Shipyard).”
Guna further asserted in the PAC report that the RMN did not agree with the decision but had to accept it as “the decision was made by the top management at Mindef (the Defence Ministry)”.
Former Navy chief Tan Sri Abdul Aziz Jaafar, in his testimony to the PAC, said: “Something is gravely wrong” with the decision by the Defence Ministry and BNS to ignore the RMN’s views when it came to the procurement of its assets.
Abdul Aziz added that he had written 10 letters voicing his “deep concerns” about the risks and non-compliance of the LCS project. The letters were addressed to, among others, the chief secretary of the Defence Ministry, the defence minister, the chief secretary to the government, the prime minister, and the deputy prime minister, but nothing was done.
As it now stands, the programme is about nine years behind schedule, and costs have soared from the initial RM6 billion, to RM9 billion.
In its latest notification to Bursa Malaysia dated May 26, 2023, Boustead announced that BNS and the Defence Ministry had finalised the negotiations on the resumption of the LCS contract, and on the same date, signed a Sixth Supplemental Contract (“SA6”) to vary the contract, amongst others, with the following terms and conditions:
- the resumption of all design and construction activities shall commence upon signing the SA6;
- the reduction of the LCS vessels from 6, to 5 units;
- the duration of the contract shall be extended with the first vessel to be delivered, fully tested, and trialled in August 2026, and the fifth vessel in April 2029;
- the total contract price is revised to RM11.2 billion following, amongst others, the approved change of specifications and extension of time; and
- the terms of payment is varied from milestone activity to progress of work reflecting the various elements in the contract, based on weightage to the design, equipment, construction and trials, and commissioning.
This entire debacle has resulted in cost overruns of RM5.2 billion, pushed back the programme by 15 years from the date the contract was signed in 2014, and reduced the RMN’s overall mission capability with the fleet slashed down to five, from the original six vessels. This poses a clear and present threat to national security.
Sadly, this gross malfeasance and blatant financial irregularity is not new.
In November 2019, Malaysia tabled its Defence White Paper. The document was supposed to map out the future direction of the Malaysian armed forces.
One of the key recommendations outlined in the DWP was that big-ticket defence procurement programmes would no longer be vendor-driven.
Instead, weapons systems acquisitions and similar programmes will be driven purely by the needs and operational requirements of the three services, and only after a careful and thorough demonstration/evaluation (DEM/EVAL) phase.
This is part of the broad, sweeping changes in the Defence Ministry, to ensure full transparency, prevent financial mismanagement and leakages of public funds, and to safeguard and ensure that Malaysia’s fighting men and women were equipped with the best assets to carry out their missions.
“If you look back, quite a number of these big-ticket defence projects were vendor-driven, often against the end-user’s advice, and sometimes, against our strategic interests,” then deputy defence minister, Liew Chin Tong, had revealed.
For a small nation with a relatively large expanse of water and land mass, Malaysia needs to be more prudent and responsible in managing public funds, vis-à-vis defence spending.
Politicians should quit meddling when it comes to weapons acquisition programmes and leave it to the professionals who are fully schooled in the art of war, on the nature of the evolving threats, and the assets and tactics needed to effectively counter them.
Unless of course, these politicians are willing to hold the line, with a rifle in their hands, when the shooting starts.
