Kuala Lumpur: The cost for the littoral combat ship (LCS) project will remain the same despite the navy receiving five units instead of the original six, says defence minister Mohamad Hasan.
He said there will be no reduction in the cost of the RM9 billion project that had been previously approved.
“Due to the many variations from the original order and inflation, the price (to build a single ship) has increased,” he told the Dewan Rakyat.
Mohamad was responding to a question from Nordin Ahmad Ismail (PN-Lumut), who asked if the government planned on adjusting the cost of the project after it was reported that the navy would only receive five LCS units.
On Jan 30, navy chief Abdul Rahman Ayob said the navy is set to receive five units of the LCS instead of six.
He said the reduction in the number of vessels was agreed upon after the government had deliberated on whether it wanted to proceed with the controversial project.
Mohamad said the funds for the project had already been used on parts to build the ships, adding that he confirmed this when visiting the shipyard in Lumut, Perak recently.
On Jan 5, he said the unity government will go ahead with the LCS project as part of its effort to strengthen the country and navy’s defences.
The LCS project, said to be the largest defence procurement in Malaysia’s history, came under much scrutiny last year after the Public Accounts Committee (PAC) revealed that not a single ship had been completed although Putrajaya had already paid out RM6.08 billion on the project.
The PAC said the navy should have received five of the ships by August last year.
The project had been awarded to Boustead Naval Shipyard Sdn Bhd (BNS) through direct negotiations.
The Malaysian Anti-Corruption Commission (MACC), which investigated the project, had previously recommended that several individuals be charged.
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