KUALA LUMPUR: The Cabinet is expected to decide on the direction of the Littoral Combat Ships (LCS) project and whether the number will be reduced from the original six units, says Datuk Seri Mohamad Hasan.
The Defence Minister told Parliament that the ministry was in its final stages of finalising the continuation of the project through the preparation of a Cabinet memorandum, which was expected to be tabled soon.
"Regarding the reduction of procurement from six to five vessels, the finer details on the continuation of the project will be tabled to the Cabinet and it is up to them to decide whether it will remain six or fewer," he said while wrapping up his ministry's motion of thanks on the Royal Address on Wednesday (Feb 22).
A report tabled to Parliament on Aug 4 by the Public Accounts Committee (PAC) highlighted the controversial procurement deal after none of the six LCS ordered had been delivered despite a RM9.13bil contract signed a decade ago.
According to the PAC, the government had paid RM6.08bil – or two-thirds of the total cost – to local contractor Boustead Naval Shipyard (BNS), although none of the ships had been delivered.
Previously, Mohamad Hasan had said that there would be no reduction in the cost of the RM9.13il project that had been previously approved.
He said the decision to reduce the number of ships was actually made by the Cabinet in April 2022 under the previous government.
"Considering that this is a new government, the Defence Ministry feels that there is a need to bring it back (to the Cabinet) to decide the continuation of the LCS project," he said.
He also noted that one of the biggest issues regarding the LCS project was the involvement of a third party and that the government had proposed the signing of an international settlement agreement to remove the third party.
"However, there is a caveat.. before they can sign the agreement, they want a letter of indemnity to excuse them from any wrongdoing.
"That is one issue that we feel a bit hard (to agree to), and we will refer this matter to the Attorney General's Chambers (AGC) for a decision.
"But at ministry level, we do not agree with the issuance of an indemnity letter as we feel those who are involved should face the law," he said.
Mohamad Hasan also stressed that there was a need to continue the project in order to beef up the country's defences.
