KUALA LUMPUR (July 8): There would be no further funding required from the government for modifications and rework on the long-delayed littoral combat ship project, a Defence Ministry official said.

The project cost remains fixed at RM11.22 billion, and any associated cost will be absorbed by Lumut Naval Shipyard Sdn Bhd (Lunas), which is owned by the Finance Ministry, as part of the contractual obligations, the project’s director Franklin Jeyasekhar Joseph told the Public Accounts Committee.

The delay was partly due to technical review requirements by France’s Naval Group, the project’s design authority, with rework on nearly 4,000 items including an additional 50km of cables on the first vessel KD Maharaja Lela, Franklin said in a proceeding on Feb 4.

The full report was released on Wednesday.

Initially slated for delivery in 2019, the project has suffered delays and cost overruns from its original RM6 billion amid allegations of mismanagement. No vessels were delivered despite the government disbursing RM6.08 billion.

The number of vessels was then reduced to five from six while the cost ballooned to RM11.22 billion. The long delays forced the government to step in and acquire the original contractor Boustead Naval Shipyard Sdn Bhd for nominal RM1 in 2023.

Naval Group only submitted its design review comments to Lunas in April 2025, about eight months after the detailed design was submitted to the government in August 2024, Franklin said.

Fully implementing all the proposed changes would have resulted in extensive rework and further delays, he noted. Lunas subsequently reviewed the required modifications with Naval Group over a period of about two months, while construction work continued.

"The modifications required following the design review were carried out concurrently with ongoing construction works, including piping and cabling adjustments," he said.

In January, Defence Minister Datuk Seri Mohamed Khaled Nordin said the delivery of the first of the vessels had been pushed back to December 2026 from the previous target of August 2026, due mainly to delays in equipment deliveries from original equipment manufacturers, as well as rework involving piping and cabling installations.

The commissioning of the second vessel has also been revised to August 2027 following the delay. As of December 2025, KD Maharaja Lela had achieved 83% completion and successfully conducted its first sea-going trial on Jan 28, 2026, reaching a speed of seven knots.

Franklin also said Lunas was addressing issues involving obsolete components identified earlier through refurbishment works by the original equipment manufacturers.

The cost of recovering critical equipment, including navigation radar and sonar systems, is being borne by Lunas under its contractual obligations, without any additional government funding.

"Under its contractual obligations, Lunas had to use its contingency funds to carry out refurbishment works and address the obsolescence issues," he said.

Meanwhile, Lunas chief executive officer Azhar Jumaat said the company had no intention of seeking additional funding from the government despite delays arising from the rework process.

"I would like to stress that the company has no intention and has never indicated any intention to seek additional costs,” he continued. “However, we request consideration that the first and second vessels will experience some delays due to the rework.”

Azhar said the government retained the right to impose late delivery penalties on Lunas in accordance with the obligations, clauses and provisions under the contract.

The first sea-going trial of the first vessel did not reveal any design-related red flags, while the third to fifth vessels remained on their original schedules, he added.

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