KUALA LUMPUR – The additional RM2 billion allocation to complete the five littoral combat ships (LCS) is to be used for the project’s non-recurring costs and is not due to cost overruns as a result of delays, Defence Minister Datuk Seri Mohamad Hasan assured.
“The RM2 billion allocation is to be used to purchase combatant assets, such as missiles, because when the LCS project started, the navy had yet to identify the missiles that they want to use,” he said.
He was explaining the project’s revised cost from RM9 billion previously to RM11.2 billion to MPs who asked if the additional allocation was caused by delays in the project’s completion.
Mohamad also clarified that the LCS project will involve five vessels instead of six because the ministry had already acquired five sets of equipment such as engines, propellers, gearboxes and generators.
Additionally, he said, the allocation would pay for the interests, insurance and management fees, as stated in the Public Accounts Committee’s (PAC) report on the LCS.
Mohamad (Rembau–BN) said this in the Dewan Rakyat today during the winding-up speech for the committee-level debate on Budget 2024 for the Defence Ministry.
He then clarified that Boustead Naval Shipyard Sdn Bhd was again chosen to complete the project because it would cost the government a lot more if the contractor were to be changed.
Earlier last month, the PAC report on the LCS project stated that the fifth vessel is estimated to be completed by 2029. – November 23, 2023