KUALA LUMPUR, Aug 4 — The Ministry of Defense (Mindef) is to present a substantive plan on military procurement to the Parliamentary Special Select Committee on Defence and Security from time to time by involving all stakeholders.
Public Accounts Committee (PAC) chairman Wong Kah Woh said the matter was among the recommendations made to the ministry following the PAC report on the acquisition of the Royal Malaysian Navy’s (TLDM) littoral combat ship (LCS).
He said the administration of government contracts should be streamlined to minimise the Variation Order (VO) to avoid an increase in the project costs.
Apart from that, Wong said, the PAC also recommended the Malaysian Anti-Corruption Commission (MACC) take action on all the findings by the PAC, the Special Committee on Governance Investigation, Government Procurement and Finance (JKSTUPKK) and the Forensic Audit Report with the prosecution to be expedited.
“The incident on the change in the design of the LCS ship from SIGMA to (type) GOWIND should be a lesson in making future procurement.
“The procurement of national defence equipment and assets should prioritise the needs of the end user, which is TLDM in this case, and in general, for all projects and procurement in the future in line with the Defence White Paper 2020-2030,” he told a press conference in Parliament, today.
Another recommendation tabled by the PAC is for MINDEF to review all options and set the best direction for the LCS project to ensure that public money is spent responsibly and for the ministry to present the progress report on the LCS every three months until the project is completed.
Wong said PAC held nine proceedings regarding the LCS issue, with the first on November 18, 2020, and the last was March 8 where several witnesses were called to testify.
The witnesses included Defence Minister Datuk Seri Hishammuddin Tun Hussein, MINDEF secretary-general General Datuk Seri Muez Abd Aziz, JKSTUPKK chairman Tan Sri Ambrin Buang and Navy Commander Admiral Tan Sri Mohd Reza Sany.
He said the result of the proceedings found that the LCS project was awarded to Boustead Naval Shipyard Sdn Bhd (BNS) through direct negotiations with the government paying RM6.083 billion, but not one LCS ship had been completed, despite the original schedule stating that five ships would be ready to be handed over by August 2022.
“Due diligence by the government on the BNS failed to detect the company’s financial problems.
“This was proven when the government had to make advance payments of up to RM1.36 billion to BNS, contrary to Treasury Circular No. 5 of 2007 which was in effect at that time,” he said.
Wong said PAC concluded that TLDM as the end user was ignored by MINDEF and BNS in the implementation of the LCS project.
The original design of LCS was SIGMA, selected by TLDM and had been agreed upon by the Minister of Defence, he said, but was changed to the GOWIND design on July 11, 2011, at the suggestion of BNS which was brought to the Minister of Defence on July 8, 2011.
— Bernama
