Boustead paid sub-contractor 200% more than needed, claims Rafizi

(FMT) – PKR deputy president Rafizi Ramli is asking why the Najib Razak administration did not purchase littoral combat ships directly from DCNS, instead of by way of a multi-layered structure involving Boustead Naval Shipyard Sdn Bhd (BNS) and two sub-contractors.

“Logically, the government of Malaysia should be employing DCNS directly (as it did for the Scorpene submarine project) since it has the requisite expertise, design and shipbuilding capability,” Rafizi said in a statement.

Instead, the government appointed BNS as its main contractor which, in turn, appointed two layers of sub-contractors, above DCNS in the structure.

FMT is attempting to seek comments from BNS and the sub-contractor named by Rafizi.

Rafizi said BNS had signed a letter of agreement with the first sub-contractor for two packages worth RM1.18 billion.

He said the sub-contractor then appointed its sister company as its own sub-contractor. The sister company then subcontracted work out to French naval company DCNS for RM397 million, marking up the cost by 200%.

Rafizi said while he understood that the reason for going through BNS was to develop local capabilities and help army veterans as the company is owned by the armed forces pension fund (LTAT), the “multiple layers” of sub-contractors hinted at elements of corruption.

He said he would continue to unveil elements of corruption in the LCS project.

Yesterday, Rafizi had said Najib cannot “wash his hands” of the LCS scandal.

He said Najib, who was in office when the government signed the deal for the LCS, was the only person with the power to influence a change in the ship’s design from the navy’s requirements.

On Thursday, Public Accounts Committee chairman Wong Kah Woh said the defence ministry and BNS had ignored the navy’s views on the LCS project.

Defence minister Hishammuddin Hussein later said those involved in misconduct in the project would be brought to justice.