KUALA LUMPUR (Aug 10): Of the RM9 billion paid by the government to build six littoral combat ships (LCS), RM6.1 billion was used to buy equipment on a "bulk order" basis, according to the Armed Forces Fund Board (LTAT).
LTAT chief executive officer Datuk Ahmad Nazim Abd Rahman said these "bulk order" purchases were done to ensure cost savings in building the LCS, which had to be done concurrently.
He also said Boustead Naval Shipyard Sdn Bhd's (BNS) shipyard in Lumut has adequate capacity to build the LCS.
"I was directly involved in formulating the LCS project recovery plan together with the Ministry of Defence and the Royal Malaysian Navy.
"I have been there (Lumut shipyard) several times and visited the LCS project.
"I can confirm that the construction of the vessels was under way," Nazim said in a Facebook posting on Tuesday (Aug 9).
The LTAT chief said a huge portion of the RM9 billion contract went to the "basic design and detailed design" carried out by Naval Group, a major player in the French naval sector.
Nazim added that the cost of building one LCS was estimated at RM1.5 billion, lower than how much other nations spent.
"Egypt spent RM1.9 billion to build a vessel that was made in France. The United Arab Emirates also spent RM1.9 billion [on an] LCS while the US built a more sophisticated LCS [for] RM2.4 billion," he said.
Nazim said the LCS project was halted in 2019 due to various reasons and the Cabinet decided to resume the project in April this year, based on the cheapest option.
He said the government was weighing up three options, including a plan to restructure BNS.
These options were examined by various levels of the government, including Cabinet committee members, over eight months.
On Monday, Senior Defence Minister Datuk Seri Hishammuddin Hussein said the first LCS would be completed by "at least a year or two".
Last week, the Public Accounts Committee revealed that Putrajaya had spent RM6 billion on the LCS project and not a single vessel had been delivered so far.