KUALA LUMPUR (June 24): The government has paid a total of RM7.15 billion to date for the long-delayed littoral combat ships (LCS) project, said Defence Minister Datuk Seri Mohamed Khaled Nordin.

According to Khaled, these payments are in accordance with the stipulated contract, which bases payments on the overall progress of the LCS project rather than on the progress of individual ship constructions.

"The RM7.15 billion paid by the government constitutes 63.69% of the total project cost of RM11.22 billion compared with the originally planned payment of 68.43% based on the project's progress," Khaled said in response to Datuk Seri Ikmal Hisham Abdul Aziz (PN-Tanah Merah) during the oral question and answer session in Dewan Rakyat on Monday.

On the progress of the LCS project, Khaled noted that the first ship has been successfully launched in the water, while work on the second ship is 64.66% complete, LCS 3 at 56.48%, LCS 4 at 54.1%, and LCS 5 at 42.33%.

"Thus, the government is confident that the LCS deliveries will be on schedule as planned, starting from August 2026," Khaled added.

The LCS project has been in the spotlight in recent years due to delays and cost overruns. Initially budgeted at RM6 billion, the development of the vessels' costs escalated to RM9.18 billion and eventually reached RM11.22 billion.

The project's scope was also reduced from six vessels to five, with revised delivery dates for each of the vessels set for August 2026, April 2027, December 2027, August 2028, and April 2029, respectively.

The extended delays prompted government intervention, leading to the acquisition of BNS for RM1 through the Ministry of Finance’s special-purpose vehicle, Ocean Sunshine Bhd.

On separate matters, Khaled said that the ministry has abandoned its plan to acquire the retired HMAS Anzac from the Royal New Zealand Navy, citing its unsuitability and the absence of clear government benefits.

He acknowledged that the ministry had previously considered acquiring these ships as a strategy to address delays in LCS construction.

"However, feedback from the Royal Malaysian Navy indicated that the acquisition would not be suitable due to equipment and procurement costs that do not align with government interests," noted Khaled.

Furthermore, Khaled said that the ministry has procured three Littoral Mission Ships (LMS) from Türkiye, scheduled for completion by the end of 2027

"With the two LCS ships set to be delivered for the Royal Malaysian Navy, a total of five vessels [including three LMS] are expected to enter service by the end of 2027," Khaled said.

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