Govt takes over THHE-Destini’s offshore patrol vessel project, provides RM153m rescue loan
This is the second public project, which is made known to the public, that has failed to deliver on time despite extension. The other project is the RM9.13 billion littoral combat ship (LCS) project that was awarded 11 years ago but not a single vessel has been delivered to date.
(The Edge) – The Ministry of Finance (MOF) has taken over the offshore patrol vessel (OPV) project from THHE Destini Sdn Bhd after discovering significant problems, including the need for the government to provide an additional loan of RM152.6 million to ensure the completion of the first vessel within this year.
Prime Minister Datuk Seri Anwar Ibrahim said the problems had led to a delay in the project’s completion, and urged enforcement agencies to continue investigating alleged abuses of power to ensure that nobody takes advantage of the public procurement process.
“We have to save [this project]; these OPVs have to be completed according to schedule. Secondly we should not let anyone who is responsible for the abuse of power [and made] a fortune out of this project to go scot-free,” Anwar said at a press conference after the weekly Cabinet meeting on Wednesday (Jan 4).
This is the second public project, which is made known to the public, that has failed to deliver on time despite extension. The other project is the RM9.13 billion littoral combat ship (LCS) project that was awarded 11 years ago but not a single vessel has been delivered to date.
THHE Destini secured the RM738.9 million job from the government in January 2017 for the supply of three units of OPV fitting and accessories for the Malaysian Maritime Enforcement Agency over a period of 42 months.
THHE Destini was owned 51% by Destini Bhd and 49% by TH Heavy Engineering Bhd. However, TH Heavy acquired Destini’s 51% stake for RM121,131 towards the end of 2021.
Prior to Destini’s exit from the joint venture, the group announced in April 2021 that the government had approved an extension of time for the delivery of the OPVs from Aug 23, 2020 to Aug 22, 2022.
Back then, Destini said the average progress of works for the OPVs was approximately 74%, with the first OPV 89.5% completed and targeted to be launched by end-August 2021.
OPV launching dragged by slipway
Citing sources, The Edge had reported in August and October last year that the Practice Note 17 company was not able to deliver the first OPV, dubbed KM Tun Fatimah, and it was seeking financial support from the government to complete the project. The Edge reported that the first vessel was stranded onshore as there was no slipway for the vessel launching.
TH Heavy’s FY21 annual report noted that the development of the slipway — a ramp for a vessel to slide or roll into the water — is part of the OPV project execution, as it will enable the erection and subsequent launching of the OPVs.
Upon completion of the OPV project, TH Heavy said the slipway will enable the group’s Pulau Indah Yard to undertake ship repair of larger ships of up to 2,500 tonnes displacement.
“However, there was a delay in the construction of the multiple-berth slipway and at this juncture, the group is only proceeding with lengthening the slipway up to its full design to remove water tide dependence for shipbuilding launching only.
“The group anticipates to complete the lengthening of the slipway activity in February 2023,” TH Heavy said in the annual report.
TH Heavy, which is 64.45% controlled by Minister of Finance Inc-owned Urusharta Jamaah Sdn Bhd, was delisted from Bursa Malaysia in September last year after the group failed to submit a regularisation plan to exit its financial distress.
