Zahid now says: ‘I was directly involved in drafting LCS recovery plan’

After denying links to the controversial RM9 billion littoral combat ship (LCS) project, former defence minister Datuk Seri Ahmad Zahid Hamidi said he was “directly involved” in drafting the project’s recovery plan with defence ministry and the navy.

(Sinar Daily) – He said he had visited the LCS project several times at Lumut Shipyard.

The former deputy prime minister said under the current contract, the construction of the six ships must be done concurrently.

“Not build 1, deliver 1,” he said, referring to the six ships.

He said Lumut Shipyard is large and it has the capacity to build 6 ships at a time.

“RM6 billion out of RM9 billion of the contract has been paid. The progress pf the construction for the first 5 ships is only at about 55%? Because 6 billion was spent to buy almost all the equipment needed to build the 6 ships.

“Bulk order is cheaper than buying one by one,” the Umno president added.

On Aug 4, the Public Accounts Committee (PAC) had said the government paid RM6.083 billion for five LCS to Boustead Naval Shipyard Sdn Bhd (BNS) for the direct-negotiation project, but none of the ships were delivered.

The PAC, in its report, said it had received the competitiveness report on BNS by the government, which was conducted to detect financial problems of the company responsible for the construction of the five ships.

The first LCS was scheduled to be delivered in 2019, but it was only 44 per cent completed, according to the PAC report.

But Zahid said most of the expenses are for design carried out by Naval Group from France, bringing the total cost of one ship to about RM1.5 billion.

“Egypt spent almost RM1.9 billion for one of their LCS ships made in France. The UAE also spent almost RM1.9 billion per LCS.

“The US built their LCS at RM2.4 billion each because it is more sophisticated,” he added.

He said after the failure to privatise the project, it was given to Boustead Naval Shipyard Sdn Bhd (BNS) to save losses throughout the financial and economic chain.

“The acquisition includes the huge bank debt that Boustead Holdings and Boustead Naval Shipyard are now forced to bear. So part of the LCS money had to be used to pay bad debts. This information is in the PAC report,” Zahid, the Bagan Datuk MP added.

But Zahid said despite the burden, BNS in Malaysia opened its technical and engineering work opportunities for almost 3000 engineers, over 400 local vendors in various fields with a project value of over RM4 billion and thousands more jobs were created in these vendor companies.

However, he said the project was halted in 2019 for various reasons but the cabinet in April 2022 decided to resume the construction of the project based on the cheapest option.

The decision was made base on 3 options, including restructuring BNS.

In a report on Umno Online, Zahid had said he should not be blamed for the problems plaguing the project as the contract was awarded in 2014, a year after his term as defence minister ended.

However, former deputy finance minister Liew Chin Tong reminded Zahid that the project was first approved by Zahid when he was defence minister in 2011.

PAC has so far called Zahid, among other top officials on the multi billion project.