Najib counters Syed Saddiq on BN 'crony' claims over RM9b LCS contract, says armed forces will profit

·4-min read
Malay Mail
Malay Mail

KUALA LUMPUR, Aug 8 — Former prime minister Datuk Seri Najib Razak today sought to counter Syed Saddiq Abdul Rahman’s claims that the Barisan Nasional (BN) government had previously given a RM9.1286 billion contract for six littoral combat ships (LCS) to a “crony” contractor.

Najib highlighted the project’s contractor Boustead Naval Shipyard Sdn Bhd is owned by the Armed Forces Fund Board (LTAT), sarcastically questioning if it was his crony.

“Whose crony is the Boustead company owned by LTAT? Is LTAT Najib’s crony?” the former Barisan Nasional chairman asked in a Facebook post.

According to LTAT’s website, it is a government statutory body that provides benefits through a retirement savings scheme for the Malaysian Armed Forces personnel and the volunteer forces.

Najib also asked a series of rhetorical questions on what alternative companies could be given the RM9 billion project, including noting that Boustead owns a dockyard in Lumut to build ships and asked who else in Malaysia has a dockyard to build warships.

“If the project is not given directly to Boustead/LTAT then who to give the project to in Malaysia or want to give to foreign companies to build our warship?” he asked.

He listed the benefits of giving the project worth over RM9 billion directly to Boustead, saying: “Boustead is owned by LTAT so all profits of the project will shift to the armed forces” personnel’s fund in the end.” “Boustead can build up local expertise to build ships and the costs for the added ships and maintenance costs subsequently is cheaper. If given to foreign contractors to fully build up, then local expertise to build our combat strength cannot be built up, locals do not get jobs and local suppliers do not get benefits,” he said.

Najib also took aim at Syed Saddiq’s criticism over Boustead using RM400 million of the RM6 billion odd funds to pay off its old debts, pointing out that the RM400 million sum was used to settle old debts for the New Generation Patrol Vehicle project.

“Boustead will also record profits from this LCS project. Not all the project price of RM9 billion iis the project cost only. So what is wrong for Boustead to use part of the profits from the project to pay off the old debt of the NGPV project?” Najib asked, also rhetorically asking if the supply of NGPV ships to Malaysia’s navy is not for national security.

Najib was responding to a video which Syed Saddiq had posted on the TikTok app and on Facebook.

In the brief video, Syed Saddiq highlighted that the LCS project was not given through open tender, but was awarded through direct negotiation to the contractor Boustead Naval Shipyard.

Syed Saddiq also highlighted the project was awarded during Najib’s term as prime minister and accused the then BN government of prioritising the alleged “crony contractor” despite the navy chief’s reprimands.

Syed Saddiq also said the contractor had been given RM6 billion when the LCS project has only reached 25 per cent completion, with RM400 million used to pay an old debt and also alluded to RM1.7 billion of equipment being left in storage.

On August 8, Parliament’s bipartisan watchdog Public Accounts Committee (PAC) had in its report said that the RM9.128 billion 10-year contract from October 2013 to October 2023 was awarded through direct negotiation to Boustead Naval Shipyard.

The PAC report also said the Malaysian government had to date already paid RM6.083 billion to the contractor, but none of the six LCS vessels have been completed. Based on the original schedule, five of the six LCS vessels should have been completed and handed over by August 2022.

According to the PAC, the project had run into cost overruns of RM1.4005 billion as the government’s payments to the Boustead Naval Shipyard was not fully used for the LCS project, noting that the RM1.4 billion overrun included RM400 million that was spent to pay off the old NGPV debt.

The PAC report said equipment kept in storage for the LCS project is estimated to be worth RM1.7 billion, with an estimated 15 per cent of these already obsolete.