KUALA LUMPUR, June 8 — Construction period and specification changes are the main factors which resulted in the cost of the littoral combat ship (LCS) project to be increased to up to RM11.2 billion.
Deputy Defence Minister Adly Zahari said according to the Sixth Supplementary Contract (SA6) signed recently, an additional 83 months are required to complete the project.
“When we agreed to continue this LCS project, definitely there will be a time period. If we look at the original agreement, the first LCS ship should have been completed in 2019. So, the 83-month increase comes at a cost.
“Among the biggest cost additions involve changes to the specifications based on the Royal Malaysian Navy (RMN) requirements.
“The government approved the specifications for the Surface-to-Surface Missile System, Decoy Launching System (DLS) and several other systems,” he said during the question and answer session in the Dewan Rakyat today.
He said this in response to a question from Tanah Merah MP Datuk Seri Ikmal Hisham Abdul Aziz regarding the timeline of the LCS project being restarted and whether it could be completed as originally planned for RMN’s use in 2026.
Adly said the specification changes are a national defence requirement, while SA6, which was signed on May 26, was the starting date for the LCS reconstruction.
He said based on the milestone plan contained in the supplementary agreement, the construction of the first LCS vessel could be completed in November 2024, before going through several evaluations by the RMN.
As such, he said the first LCS ship is expected to be commissioned by the end of 2026.
In addition, Adly said the improvements made in SA6 also stipulate that the government could continue to pay the original equipment manufacturers (OEMs) through the Finance Ministry, without going through middlemen.
According to him, to ensure the project could be completed, four monitoring committees have been formed, adding that the payment model was also improved from milestone to progress payment.
Commenting on the latest status of the settlement of international agreements involving the companies Contraves Advanced Devices Sdn Bhd (CAD) and Contraves Electrodynamics Sdn Bhd (CED), Adly said the transactions do not involve the government.
“The government does not need to bear any responsibility because the agreement is a company business matter not related to the government’s contract,” he said.
— Bernama
