LCS 1 handover at risk as training, weapons systems remain incomplete
PETALING JAYA: Malaysia’s troubled Littoral Combat Ship (LCS) project is facing further delays, with the first vessel at risk of being handed over without achieving full operational capability, according to the Auditor-General’s Report 2/2026.
Auditor-General Datuk Seri Wan Suraya Wan Mohd Radzi said the project was already 7.55% behind schedule as of June 25, with delays ranging from 30 to 108 days.
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She said the delays posed a risk to the Physical Handover (PHO) of LCS 1, which was initially scheduled for Aug 26 before being revised to Dec 26.
“If the PHO takes place on either date, LCS 1 will be delivered without achieving full capability because training and weapon systems remain incomplete,” she said in a statement.
Wan Suraya said the project’s full operational readiness also depended on a supplemental contract that could only be completed by December 2035, five years beyond the April 25, 2030 deadline under the main contract.
She said any delay in the handover of LCS 1 would directly affect the scheduled handovers of LCS 2 to LCS 5.
The audit was conducted on an interim basis to assess the project’s physical and financial progress, contract management and payments against contractual terms and applicable regulations.
It also followed a recommendation by the Public Accounts Committee in its report dated Oct 9, 2023, for the National Audit Department to audit the LCS project before the delivery of LCS 1 to the Royal Malaysian Navy.
To get the project back on track, Wan Suraya said the Defence Ministry should establish a realistic recovery plan to ensure critical activities under both the main and supplemental contracts were aligned with the LCS handover schedule.
She also recommended that any conditional acceptance of the vessel clearly spell out the contractor’s obligations, completion timelines and responsibilities until full capability is achieved.
She added that the ministry should strengthen project monitoring by assigning accountable officers and setting clear resolution timelines for every critical issue until the project is completed.
