UMNO Zahid State Debt Explanation: More than RM 9 Billion Taxpayer’s Money Spent For LCS Project Without One Warship Sent
UMNO Zahid State Debt Explanation: More than RM 9 Billion Taxpayer’s Money Spent For LCS Project Without One Warship Sent

UMNO Zahid State Debt Explanation: More than RM 9 Billion Taxpayer’s Money Spent For LCS Project Without One Warship Sent

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The Parliamentary Public Accounts Committee (PAC) has found that the government has paid a total of RM6.08 billion for the Littoral Combat Ship (LCS) project, but not a single vessel has been delivered.

According to the original schedule, as of August 2022, five ships must be completed and handed over to the Royal Malaysian Navy (TLDM).

PAC chairman Wong Kah Woh said that the view of TLDM as an end user was ignored by the Ministry of Defense (Mindef) and the company Boustead Naval Shipyard Sdn Bhd (BNS) in the implementation of the LCS project. Initially, the SIGMA type ship design selected by TLDM was approved by Mindef. The decision was changed to a GOWIND type ship design on 11 July 2011, at the suggestion of BNS, which was brought to Mindef on 8 July 2011.

He quoted the then-Navy Commander Tan Sri Abdul Aziz as saying “something is very wrong”.

Wong further said that the government’s due diligence on BNS failed to detect the company’s financial problems. It was proven when the government had to pay an advance of up to RM1.36 billion to BNS, contrary to the Treasury Circular No. 5 of 2007, which was in effect at that time.

The chairman of the PAC also pointed out that the financial situation of BNS is weak and critical due to abuse of power and deficiencies in financial management. In 2018, BNS’s debt to original equipment manufacturers was RM801 million, while its loan to financial institutions was RM956 million.

“The terms of the contract are weak and do not benefit the government. Payments for LCS projects are based on progress of activities or supply of goods and not on actual progress. This is unusual and causes LCS1 progress pay to exceed actual work progress by 21.1% (payment of 63.8% versus actual work progress of 42.7%).

“Until now the design details have not been finalized by the government and BNS. This causes VO to come out continuously and opens up room for manipulation,” he added.

UMNO President Datuk Seri Dr Ahmad Zahid Hamidi, who was among the top officials summoned by the PAC, was defense minister in 2011.

The others summoned included current Defense Minister Datuk Seri Hishammuddin Hussein, Defense Ministry secretary general Datuk Seri Muez Abd Aziz, former Auditor-General Tan Sri Ambrin Buang, current navy chief Tan Sri Admiral Mohd Reza Sany, BNS’ COO Low Kok Chiang and its CEO Sharifuddin Md Zaini Al-Manaf.

PAC suggests that the ministry should submit substantive military procurement plans to the Parliamentary Defense and Security Special Committee from time to time involving all stakeholders for national defense preparedness, as well as presenting progress reports on the SCS project every three months until the SCS project is completed.

Wong also asked the Malaysian Anti-Corruption Commission to investigate all findings of the PAC Report, Governance, Procurement and Finance Committee Investigation report, and Forensic Audit Report immediately.

“The change in the selection of the LCS ship design from SIGMA to GOWIND should be a lesson for future procurement. The acquisition of defense equipment must prioritize the needs of end users, namely TLDM in this case, and in general for all future projects and acquisitions in line with the 2020-2030 Defense White Paper,” said Wong.

In addition, the PAC also recommends that the government review all options and determine the best direction for the SCS project and ensure that public money is spent responsibly.

Source: Malaysia Reserve

Kit Siang questions MACC’s lack of action on the RM9 billion Littoral Battleship project scandal

The Malaysian Anti-Corruption Commission (MACC) has been urged to act on a report by the Parliamentary Public Accounts Committee (PAC) on the RM9 billion Royal Malaysian Navy (RMN) Littoral Combat Ship (LCS) project.

DAP veteran Lim Kit Siang also urged MACC chief commissioner, Tan Sri Azam Baki, to explain to people what the commission was doing and why they had not acted earlier on the findings of the PAC report.

Lawmaker Iskandar Puteri said former Deputy Defense Minister Liew Chin Tong, in 2020, had urged the government to investigate the missing RM1 billion related to the LCS project.

“We do not see any investigations announced by the government or any action taken by MACC since then.

“The PAC report may have given MACC some clues about the money being lost.

“It is surprising to note that the PAC report reveals not only RM1 billion but RM1.4 billion has been lost.

“A total of RM400 million was used by contractors to pay off old debts, RM305 million was used to build a center in Cyberjaya which was relatively unrelated to shipbuilding and RM700 million was classified as cost overrun by the contractor,” he said. said in a statement shared on his blog at today.

The scandal, he said, had also proven Azam wrong as the MACC chief commissioner had previously dismissed Transparency International’s (TI) annual Corruption Perceptions Index (CPI) as “just a perception and not a fact”.

He added that the PAC report showed that “everything went wrong” in the RM9 billion LCS Project – from contractor appointments, ship design choices to how taxpayer money was spent.

Lim also criticized Umno president Datuk Seri Dr Ahmad Zahid Hamidi over the matter.

“Zahid, the defense minister at the time, had chosen to remain silent in the last 24 hours despite being mentioned in the PAC Report for his decision to select the Gowind design by the French Naval Group for the LCS, against the desire of the Navy as an end user to have the Sigma design from Dutch.

“He owes the country an explanation as to why he made such a decision in favor of the contractor,” he said, adding that issues involving national security and Navy personnel were the ones who would go to war using the SCS.

Lim also questioned what made Zahid ignore the protest letter sent by Tan Sri Dr Abdul Aziz who was then head of RMN.

“The ball is in the MACC courts now to investigate every aspect of the spending and let people know whether the money was actually siphoned off and who ultimately benefited from it,” he said.

Source: NST

Many letters were sent to officials about the SCS, none addressed: former naval commander

High-ranking government officials were alerted on numerous occasions to possible problems arising from the procurement process for the six coastal combat ships (LCS) but took no action to address them.

This was stated by former Navy Commander Tan Sri Abdul Aziz Jaafar at the Public Accounts Committee (PAC) session on July 29, 2021.

His testimony was included in the committee’s report on the LCS which was released yesterday.

According to Aziz, who served as Commander-in-Chief of the Navy from April 2008 to November 2015, he had expressed his suspicions and views to the Navy through letters of reprimand and discontent to high-ranking federal government officials and the Ministry of Defense.

These included two letters to then-prime minister Datuk Seri Najib Razak, five letters to the defense minister, 10 letters to the ministry’s secretary-general, and one each to the secretary-general of the treasury, and the chief government secretary.

Datuk Seri Ahmad Zahid Hamidi led the Ministry of Defense from April 2009 to May 2013, followed by Datuk Seri Hishammuddin Hussein.

For the record, while the letter of intent for the procurement of LCS was first made in October 2010, a new official contract was signed with Boustead Naval Shipyard Sdn Bhd (BNS), a ship provider, in July 2014.

“All the letters I sent have been archived. We archive them to ensure that they will be available for reference, and I will not be blamed for my failure to do my job as commander-in-chief of the navy,” Aziz said.

“I have anticipated (procurement problems), please provide information. Because from the start, I have voiced concerns over the procurement process. I said, ‘something is very wrong’.

“I never said this on the outside, but now is the best opportunity for me to tell you that I have registered my greatest disappointment with everyone who should have listened to me.”

Aziz testified that he suspected something was wrong with the procurement of the LCS because during the acquisition of the ship by the government on behalf of the navy, BNS was given full control over the project.

He recalled how the company had previously issued a statement notifying that requests made by the navy about ship specifications were subject to evaluation and verification.

“This is weird. If I build a house and say I want it, you’d be very good at getting it done. True or false? The fact that it’s the other way around clearly shows a lack of transparency.”

Aziz said BSN’s claim that the selection of certain equipment for ships was carried out as part of cost-cutting measures was also proven wrong after cost verification.

“It gives the impression that we have been conned. It was disappointing.”

He also said Boustead’s actions to ignore the navy’s demands showed that the company was very arrogant and appeared to be “highly protected”.

He added that the navy’s demand for the SCS has always been to ensure that any equipment purchased is value for money, technologically advanced, will enhance defense capabilities, and will allow the navy to be highly capable.

Yesterday, PAC Chairman Wong Kah Woh said the recommendation was based on the findings made under several reports, namely the PAC report, as well as the Governance Investigation Committee, the Government Procurement and Finance report, and the forensic audit report.

This issue arose following the findings made by the National Audit Department, which were reported in the 2019 Auditor General’s Report (Ministry and Department Compliance Audits), as well as appearing in the Special Committee’s report.

Among the witnesses summoned for the trial included Hishammuddin, Zahid, and the secretary general of the Ministry of Defense Datuk Muez Abd Aziz.

Others include Special Committee chairman Tan Sri Ambrin Buang, RMN chief Tan Sri Mohd Reza Mohd Sany, Armed Forces Fund Board (LTAT) chief executive officer (CEO) Datuk Ahmad Nazim Abd Rahman, Boustead Heavy Industries Corporation Bhd CEO Sharifuddin Md Zaini Al-Manaf , and Boustead Naval Shipyard Sdn Bhd chief operating officer Low Kok Chiang.

Wong said the Defense Ministry must submit quarterly progress reports on the LCS project to PAC until the project is completed.

Source: The Vibes

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