Defence Minister Hishammuddin Hussein recently announced that the government will proceed with the troubled littoral combat ship (LCS) procurement project. Going by media reports, he offered three reasons for the government’s decision: first, the navy needs the vessels; second, the vendors and companies involved needed to be compensated; and third, failure to resolve the issue would negatively impact the financial standing of the Armed Forces Fund Board (LTAT) and its contributors who are retired armed forces personnel.
Boustead Naval Shipyard, which was awarded the LCS contract, is a subsidiary of Boustead Holdings which is 59.4% owned by LTAT.
The project for the construction of the 6 ships, originally valued at RM9.128 billion, was signed in 2014 with the first vessel to be delivered in 2019. It was the largest single defence procurement project in Malaysia’s history. Everything, it seems, quickly went wrong after that. According to reports, although the government paid out some RM6 billion, not a single vessel has been built. What’s worse, close to RMI billion cannot even be accounted for.
Both the Public Accounts Committee as well as the Auditor-General found that the project was riddled with questionable payments and mismanagement. Several individuals involved in the project were arrested by the MACC and investigations are continuing.
It isn’t the first time, of course, that a defence procurement project has gone awry. In fact, it has been happening with sickening regularity. Over the years, billions have been spent on aircraft that had to be grounded, helicopters that were not delivered, submarines that had problems diving and ghost patrol vessels and ships of dubious quality. Is anyone surprised that we are caught up in yet another huge defence procurement scandal?
It’s all well and good for the defence minister to now talk about the needs of the navy or the interests of the vendors and retired armed forces personnel, but what about the interests of the taxpayers?
Don’t they deserve at least an explanation about what happened to the RM6 billion that has already been spent? Was the money stolen or misappropriated? Who is responsible for this colossal loss of public funds? Whatever it is, it is simply criminal to proceed with the project without a thorough, transparent and independent investigation into what went wrong and who was responsible for the fiasco.
Perhaps the greater scandal is that despite all the defence procurement fiascos that have taken place going back decades, not a single politician, senior general, senior civil servant or CEO has ever been taken to task, leave alone jailed, for malfeasance, corruption or dereliction of duty?
Each time a project is in danger of failing (or each time a big government-linked entity runs into financial difficulties), the government rushes in to bail them out with public funds on the grounds that bumiputeras will suffer loss. Didn’t they think of the bumiputeras when they were dishing out contracts to their cronies? Didn’t the people who were responsible for managing the projects not think of their fellow bumiputeras when they were colluding and conspiring amongst themselves to misappropriate funds? Why should the taxpayers have to pay for their greed, dishonesty and incompetence?
It is not just unfair to the millions of other taxpayers but without accountability and transparency, every project and every bumiputera enterprise becomes an opportunity for select bumiputeras politicians and their cronies to steal and misappropriate public funds. If this is what the bumiputera agenda has become, then it is an iron yoke upon the people of Malaysia – bumiputera and non-bumiputera; it’s nothing more than an officially-sanctioned criminal scheme to loot and launder public funds.
[Dennis Ignatius | Kuala Lumpur | 7th April 2022]
 Parliament, Cabinet want LCS project to continue, says Hisham, Bernama, 30 March 2022
 Businessman in cahoots with S’pore firms in LCS scandal, The Star, 27 January 2022
 LCS project scandal: Be transparent to the people on findings, MP says, Focus Malaysia, 3 February 2022
 Another nabbed by MACC over LCS procurement case, NST 26 January 2022