PAC Seeks Quarterly Reports To Keep LCS Project On Track

KUALA LUMPUR, July 8 (Bernama) -- The Public Accounts Committee (PAC) has recommended that written progress reports on the Littoral Combat Ship (LCS) project be submitted to the committee every three months, beginning in May, to ensure that any delays or new issues are addressed promptly.

PAC chairman Datuk Mas Ermieyati Samsudin said the Defence Ministry (MINDEF) and the Ministry of Finance (MOF) must also maintain strict financial discipline to ensure that the overall contract value of the LCS project remains within the approved ceiling of RM11.22 billion.

She said MINDEF must also ensure the successful completion of the project, with all five vessels delivered to the Royal Malaysian Navy (RMN) according to the stipulated timeline and cost.

“The LCS contractor, Lumut Naval Shipyard (LUNAS), must ensure that warranty stock for critical equipment, such as radar systems, is always sufficient to avoid recurring delays arising from the failure of international vendors.

“The government must strengthen all mitigation measures and diplomatic efforts to secure a fair resolution while ensuring the country's fiscal sovereignty remains protected," she told a press conference at the Parliament building here today.

Mas Ermieyati said the PAC statement on the Progress Report of the Second Generation Patrol Vessel for the RMN under MINDEF was tabled in the Dewan Rakyat today, adding that the committee would continue to monitor the project closely.

Meanwhile, she said the committee had also recommended that the government fully utilise all avenues for amicable negotiations or legal proceedings to seek compensation relating to the Naval Strike Missile (NSM), in accordance with the terms of the contract.

She said the PAC had summoned MINDEF on June 23 to provide a comprehensive explanation on the Norwegian government's decision to revoke and cancel the export licence for the NSM under the LCS development project.

Following the proceedings, the committee concluded, among others, that the total LCS contract value would remain at the fixed price of RM11.22 billion, while all costs arising from rework or replacement of obsolete components would be fully borne by LUNAS without any additional government funding.

Mas Ermieyati said the government had also adopted the Earned Value Management (EVM) method, under which payments are made only based on the value of verified physical work completed, replacing the previous milestone-based payment system that was exposed to the risk of overpayment.

“The delivery of LCS 1 has been rescheduled to December this year, a delay of four months, while LCS 2 is scheduled for delivery in August 2027. However, the delivery schedule for LCS 3 to LCS 5 remains unchanged under the original contract, with the final vessel due for delivery by April 2029,” she said.

-- BERNAMA