Unreasonable to pinpoint LCS procurement failure on me, says Zahid

KUALA LUMPUR - Umno president Datuk Seri Ahmad Zahid Hamidi said it is unreasonable to point fingers at him as he was not the defence minister when the littoral combat ship (LCS) project was granted.

Zahid, former deputy prime minister from 2009 to 2013 said those who caused the failure to supply LCS should explain to the Public Accounts Committee (PAC).

“Any party that caused the delay of the construction should be responsible to explain to the PAC," he was reported in Umno Online.

Zahid was the defence minister from April 2009 to May 2013.

He said LCS was built by Boustead Holdings Berhad subsidiary company, Boustead Naval Shipyard (BNS) Sdn Bhd, whose major shareholder is the Lembaga Tabung Angkatan Tentera (LTAT).

“Based on the audited report by PAC, the contract to Boustead is in accordance with the Direct Negotiation Procurement Application Guidelines dated 17 April 2002.

"Clearly it has nothing to do with me, in fact, LTAT itself is the largest shareholder in the LCS construction company," he said.

Zahid further said he was willing to testify and explain to PAC.

On August 4, PAC chairman Wong Kah Woh said in a statement that the maritime force's views as end users of the vessels were not taken into account, which led to the original Sigma design chosen by the Navy being changed to the Gowind design on July 11, 2011, following a suggestion by BNS to the minister of defence on July 8, 2011.

The committee also found that the contract for the LCS project was awarded to BNS through direct negotiations, according to Wong.

PAC will summon Zahid to complete the proceedings over the failure to supply six LCS worth RM9 billion by early next month.

Also to be called at the PAC proceedings are the former Navy Commander Tan Sri Abdul Aziz Jaafar and the main contractor of the LCS ship project Boustead Naval Shipyard (BNS) Sdn Bhd.

Wong said the appointment of BNS was carried out through direct negotiations and a total of RM6.083 billion was paid until last October.

However, according to the schedule, two LCS ships should have been completed so far, but not one LCS ship had been built.

The issue was reported in the Auditor General's Report 2019 Series 1 (Ministry/Federal Department Compliance Audit) and the Investigation Report of the Government Governance, Procurement and Finance Investigation Committee (JKSTUPKK), published in 2019.