BNS saved Tun M-era 'sick projects'
Datuk Seri Najib Razak - Bernama pic
This comes after the controversial RM9 billion coastal combat ships (LCS) project in 2011 of which Public Accounts Committee (PAC) has claimed that none of the ships have been delievered under Najib's leadership.
Najib, in his latest posting said the government through Boustead Naval Shipyard Sdn Bhd (BNS) owned by the Armed Forces Fund Board (LTAT) had to bailout the construction of 27 new generation patrol vessels (NGPV) project by buying a majority stake in the PSC-Naval Dockyard company in December 2005.
"In 1991, the navy was incorporated by the government under the fourth prime minister.
"Then it was sold in 1995 to a private company, Penang Shipbuilding & Construction Corporation (PSC) to become a PSC-Naval Dockyard company.
"In 1998, the government awarded contracts for 27 NGPV project with an estimated budget of RM30 billion to private companies.
"The first phase involved the first six ships at a cost of RM6 billion. However, this contract failed and not a single ship was handed over by the PSC-Naval Dockyard until June 2005," he said in a statement on Thursday.
Najib said the government through Boustead had to bailout the project by buying a majority stake in PSC-Naval Dockyard in December 2005.
The company was later rebranded into Boustead Naval Dockyard Sdn Bhd.
"Although BNS was burdened with debts and legacy problems of the PSC-Naval Dockyard, it managed to save the project and deliver six NGPV vessels between 2006 and 2010.
"At that time, the navy and the government no longer intended to proceed with the construction of the remaining 21 NGPV vessels worth around RM24 billion and chose to replace this project with the LCS project which is a major controversy today.
"Therefore, the letter of award was given in 2011 to allow BNS to start negotiating with TLDM and vendors to develop LCS projects and to continue to build capabilities and expertise in the country's defence industry," he explained.
Najib added that the final contract to build six LCS ships that are much larger and more sophisticated than NGPV was only signed in July 2014, where physical construction of LCS vessels only began in January 2015.
He said BNS would indeed make a profit if it was awarded a construction contract for six LCS vessels.
"As disclosed by the Public Accounts Committee (PAC) and LTAT CEO (Datuk Ahmad Nazim Abdul Rahman), the BNS company has used RM400 million from the down payment for the LCS project to settle bad debts for the NGPV project," he said.
