UMNO Zahid Owes The Nation An Explanation : Over RM 9 Billion Taxpayer Money Spent On LCS Project Without A Single Warship Delivered

THE Parliament’s Public Accounts Committee (PAC) has found that the government has paid a total of RM6.08 billion for the Littoral Combatant Ships (LCS) project, but not a single ship has been delivered.

According to the original schedule, as of August 2022, five ships should be completed and handed over to the Royal Malaysian Navy (TLDM).

PAC chairperson Wong Kah Woh said that TLDM’s view as an end user was ignored by the Defence Ministry (Mindef) and Boustead Naval Shipyard Sdn Bhd (BNS) company in the implementation of the LCS project. Originally, the design of the SIGMA-type ship chosen by the TLDM was approved by Mindef. The decision was changed to the GOWIND type ship design on July 11, 2011, at the suggestion of BNS, which was brought to Mindef on July 8, 2011.

He cited the statement of Navy Commander Tan Sri Abdul Aziz, at that time, saying “something is gravely wrong”.

Wong further said that due diligence carried out by the government on BNS failed to detect the company’s financial problems. This was proven when the government had to make an advance payment of up to RM1.36 billion to BNS, contrary to Treasury Circular No 5 of 2007, which was in force at that time.

The PAC chairman also pointed out that the financial situation of BNS is weak and critical due to abuse of power and deficiencies in financial management. As of 2018, BNS’ debt to original equipment manufacturers is as much as RM801 million, while its loans with financial institutions are as much as RM956 million.

“The terms of the contract are weak and do not favour the government. Payment of LCS projects is based on the progress of activities or supply of items and not on actual progress. This is unusual and it causes the LCS1 progress payment to exceed the actual work progress by 21.1% (payment of 63.8% compared to the actual work progress of 42.7%).

“Until now, the detailed design has not yet been finalised by the government and BNS. This causes VO to be released continuously and opens up space for manipulation to occur,” he added.

Umno president Datuk Seri Dr Ahmad Zahid Hamidi, who was among the top officials summoned by the PAC, was the defence minister in 2011.

The others summoned included current Defence Minister Datuk Seri Hishammuddin Hussein, Defence Ministry secretary general Datuk Seri Muez Abd Aziz, former Auditor-General Tan Sri Ambrin Buang, current navy chief Tan Sri Admiral Mohd Reza Sany, BNS’ COO Low Kok Chiang and its CEO Sharifuddin Md Zaini Al-Manaf.

PAC suggests that the ministry needs to present substantive military procurement planning to the Parliamentary Special Select Committee on Defence and Security from time to time by involving all stakeholders for the sake of national defence preparedness, as well as present a progress report on the LCS project every three months until the LCS project is completed.

Wong also calls for the Malaysian Anti-Corruption Commission to investigate all the findings of the PAC Report, the Committee on Governance, Procurement and Finance Investigation report, and the Forensic Audit Report immediately.

“The incident of the LCS ship design selection change from SIGMA to GOWIND should serve as a lesson for future procurement. The acquisition of national defence equipment and equipment should prioritise the needs of the end user, which is TLDM in this case, and in general for all future projects and acquisitions in line with the Defence White Paper 2020-2030,” said Wong.

In addition, the PAC also recommended that the government review all options and determine the best direction for the LCS project and ensure that public money is spent responsibly.

Source : The Malaysian Reserve

Kit Siang quizzes lack of MACC action on RM9 billion Littoral Combat Ship project scandal

The Malaysian Anti-Corruption Commission (MACC) has been urged to act on the Parliamentary Public Account Committee’s (PAC) report on the Royal Malaysian Navy’s (RMN) Littoral Combat Ship (LCS) project worth RM9 billion.

DAP veteran Lim Kit Siang also urged MACC chief commissioner, Tan Sri Azam Baki, to explain to the people what the commission was doing and why it had not acted earlier on the findings by the PAC report.

The Iskandar Puteri member of parliament said former Deputy Defence Minister Liew Chin Tong, back in 2020, had urged the government to investigate the missing RM1 billion linked to the LCS project.

“We did not see any investigation being announced by the government nor any action taken by the MACC since then.

“The PAC report may have given some clue to the MACC about the missing money.

“It is shocking to note that the PAC report revealed not only RM1 billion but RM1.4 billion had disappeared.

“A sum of RM400 million was used by the contractor to pay off its old debt, RM305 million was used to build a centre in Cyberjaya relatively unrelated to the ship-building and RM700 million was classified as cost-overrun by the contractor,” he said in statement that was shared on his blog at today.

The scandal, he claimed, had also proven Azam wrong as the MACC chief commissioner had earlier dismissed Transparency International (TI)’s annual Corruption Perception Index (CPI) as “mere perception and not facts”.

He added that the PAC report showed that “everything is wrong” in the RM9 billion LCS Project – from the appointment of the contractor, the choice of the design of the vessel to how the taxpayers’ monies were spent.

Lim also criticised Umno president Datuk Seri Dr Ahmad Zahid Hamidi over the matter.

“Zahid, the defence minister at the time, has chosen to keep quiet in the past 24 hours despite being named in the PAC Report for his decision to choose the Gowind design by the French Naval Group for LCS, against the wishes of the Navy as the end user to have the Sigma design from the Dutch.

“He owes the nation an explanation on why he made such a decision favouring the contractor,” he said, adding that the issue involved national security and the Navy personnel were the ones who would go to war using the LCS.

Lim also questioned what drove Zahid to ignore the letters of protest sent by Tan Sri Dr Abdul Aziz, who was then the RMN chief.

“The ball is in the MACC’s court now to investigate each and every aspect of the spending and tell the people whether the money was actually siphoned off and who had eventually benefited from it,” he said.

Source : NST

Many letters sent to officials about LCS, none addressed: ex-navy commander

Top government officials were alerted on numerous occasions of possible problems emerging from the procurement process of the six littoral combat ships (LCS) but took no measures to address them.

This was revealed by former navy commander Tan Sri Abdul Aziz Jaafar during a Public Accounts Committee (PAC) proceeding on July 29, 2021.

His testimony was included in the committee’s report on LCS that was released yesterday.

According to Aziz, who was the navy chief from April 2008 to November 2015, he had expressed his suspicion and the view of the navy via letters of reprimand and dissatisfaction to the top echelons of the federal government and Defence Ministry.

This included two letters to the then prime minister Datuk Seri Najib Razak, five letters to the defence minister, 10 to the ministry secretary-general, and one each to the secretary-general of the treasury, and chief secretary to the government.

Datuk Seri Ahmad Zahid Hamidi helmed the Defence Ministry from April 2009 to May 2013, followed by Datuk Seri Hishammuddin Hussein.

For the record, while a letter of intent for the LCS procurement was first made in October 2010, the official contract was only signed with Boustead Naval Shipyard Sdn Bhd (BNS), the vessel provider, in July 2014.

“All these letters that I sent have been archived. We archived them to ensure that they will be available for reference, and I would not be blamed for the failure to perform my job as the chief of the navy,” said Aziz.

“I anticipated (the problems in procurement), for your information. Because from the start, I have raised concerns over the procurement process. I said, ‘something is gravely wrong’.

“I have never said this outside, but now is the best opportunity for me to inform you that I have registered my greatest disappointment to everyone who is supposed to be listening to me.”

Aziz testified that he suspected something was off with the LCS procurement because while the acquiring of the vessels was done by the government on behalf of the navy, BNS was given full control over the project.

He recalled how the company had previously issued statements notifying that the requests made by the navy about the specifications of the ships were subjected to its evaluation and verification.

“This is odd. If I were to build a house and say I want that, you would bloody well get it done. Right or not? The fact that it happened the other way round clearly shows there was no transparency.”

Aziz said BSN’s claim that the selection of certain equipment for the vessels was done as part of cost-cutting measures was also proven false following cost verification.

“This gives the picture as though we have been cheated. That was disappointing.”

He also said the action taken by Boustead to ignore the demands of the navy showed that the company was being very arrogant and appeared as though it was “very well protected”.

He added that the navy’s request for the LCS has always been to ensure that any equipment purchased is value for money, technologically advanced, will enhance defence capability, and will enable the navy to be highly capable.

Yesterday, PAC chairman Wong Kah Woh said the recommendation was based on the findings made under several reports, namely PAC’s report, as well as the Special Committee on Governance Investigation, Government Procurement and Finance report, and the forensic audit report.

This issue cropped up following findings made by the National Audit Department, which were reported in the 2019 Auditor-General’s Report (Compliance Auditing of Ministries and Departments), as well as appearing in the Special Committee report.

Among witnesses who were summoned to the proceedings include Hishammuddin, Zahid, and Defence Ministry secretary-general Datuk Muez Abd Aziz.

Others include Special Committee chairman Tan Sri Ambrin Buang, RMN chief Tan Sri Mohd Reza Mohd Sany, Armed Forces Fund Board (LTAT) chief executive officer (CEO) Datuk Ahmad Nazim Abd Rahman, Boustead Heavy Industries Corporation Bhd CEO Sharifuddin Md Zaini Al-Manaf, and Boustead Naval Shipyard Sdn Bhd chief operating officer Low Kok Chiang.

Wong said the Defence Ministry must submit its progress report for the LCS project every three months to the PAC until the project is completed.

Source : The Vibes

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