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KUALA LUMPUR – Boustead Naval Shipyard (BNS) has rubbished claims that 15% of the equipment meant to outfit the navy’s littoral combat ships (LCS) are obsolete, insisting that they are still usable.
The company’s chief executive officer Azhar Jumaat said the finding by the Public Accounts Committee (PAC) is not entirely accurate, and that the equipment would still be installed on the vessels.
Media reports quoted him as saying that although the equipment may require routine maintenance, the items can last for another 25 years.
“All the equipment is certified and not obsolete, and can be used another 25 years from now. It is ready to be installed,” he said during a media tour of the shipyard in Lumut, Perak, where selected news agencies were invited today.
Azhar sought to clarify the RM6 billion that has been spent by the government to date in procuring the six LCS.
The first vessel was supposed to be handed over to the government in April 2019, while the last ship was scheduled for delivery in June next year.
According to the PAC report released last week, based on testimonies from witnesses, it was found that about 15% of the total equipment in storage, which is valued around RM1.7 billion, have become obsolete.
The report also highlighted that terms of contract for the LCS were not favourable to the government, and that there has already been a cost overrun amounting to RM1.4 billion.
Azhar clarified that based on the original agreement with contractors, equipment like weapons and the main engine are required to be supportable for 30 years.
“So there is no issue of being obsolete within this time frame. It has been guaranteed in the contract,” he said.
Commenting on the RM6 billion that have been disbursed by the government to BNS, Azhar explained that other than the RM1.7 billion worth of equipment currently stored in warehouses, another RM1.8 billion of hardware has already been fitted into five ships which are in various stages of completion.
The remaining RM2.5 billion, according to him, are spent on overheads and other intangibles.
These include insurance, project management, electricity charges, infrastructure and construction works.
Meanwhile, providing an update on the status of the LCS, Azhar said the first vessel is currently at 60% completion, with four others respectively at 48%, 43%, 36% and 22%. The final ship has yet to begin construction. – The Vibes, August 13, 2022