KUALA LUMPUR (Oct 7): Government and opposition lawmakers pressed the Ministry of Defence (Mindef) on Wednesday to resolve outstanding weapons and support procurements for the littoral combat ship (LCS) programme, warning that taking delivery of a vessel without its full combat capabilities would fall short of what taxpayers had paid for.
Debating the Auditor General’s Report in the Dewan Rakyat, members of parliament questioned shipbuilder Lumut Naval Shipyard Sdn Bhd (Lunas) over construction delays and the ministry over its coordination of the separate procurements needed to equip, test and operate the ships.
“Ships, weapons, ammunition, protection systems and operational support must be completed according to one coordinated plan,” said Tan Hong Pin (PH-Bakri).
“When contracts are delayed, payment claims are blocked and implementation is disrupted. Ultimately, the entire ship schedule is affected. Where was the coordination and oversight before these problems dragged on?”
The debate followed the tabling of the Auditor General’s Report 2/2026 on Monday, which warned that the first LCS could be handed over without a complete weapons systems and the needed training.
As of June 2026, four complementary procurements — integrated logistics support and trial aids, surface-to-air missiles, 57mm 3P ammunition and decoy ammunition — had not been finalised. Procurement of the surface-to-surface missile had also stalled.
Subsequent ministry responses recorded progress on some agreements.
The logistics and trial-support contract was signed by the contractor on Aug 11 and by the government on Aug 26. A letter of acceptance for 29 surface-to-air missiles was signed on Aug 3, although the stated supply period was 69 months.
For the gun and decoy ammunition, unsuccessful open tenders led the navy to submit requests for direct negotiations with the original equipment manufacturers in August.
Meanwhile, Norway’s revocation of the export licence for the Naval Strike Missile left Malaysia without delivery of 48 missiles and two telemetry missiles, despite payments totalling €124.35 million (RM571.24 million) — about 96.6% of the revised contract value. Mindef’s €214.66 million demand for compensation and repayment remained unresolved at the time of audit. The ministry said settlement negotiations were held in Türkiye on Aug 12 and 13.
Mindef has said it could consider conditional acceptance of the first LCS, but this would not release the contractor from outstanding obligations, including missile installation and integration and crew training.
Resolve procurement bottlenecks
Former deputy defence minister Datuk Seri Ikmal Hisham Abdul Aziz (PN-Tanah Merah) separately warned on Wednesday that Lunas also needs to settle its unresolved supply of rigid-hull inflatable boats (RHIBs) that remains a bottleneck for the LCS project. The AG report found the RHIBs did not meet contractual specifications. The issue had been raised since 2019.
“Will Mindef impose liquidated damages on Lunas, or continue to give it leeway?” Ikmal Hisham asked.
Lunas has proposed to postpone the first ship’s handover to April 19, 2027, beyond both its Aug 26, 2026 contractual deadline and the subsequent December 2026 target, according to the AG report.
LCS 1, however, could attain full capability only in December 2035 under a scenario requiring fresh procurement of surface-to-surface missiles, the AG report said.
That estimate assumes three years for replacement procurement and a further six years for implementation, matching the duration of the original missile contract.
The audit found overall progress at 78.99% as at June 25, against a scheduled 86.54%, with all five ships between 30 and 108 days behind schedule. The government had paid RM8.557 billion under the RM11.227 billion main contract.
Datuk Seri Shahidan Kassim (PN-Arau) also called for payment of the remaining RM2.67 billion under the main contract to be tied to verifiable milestones, with regular updates to the Public Accounts Committee and clear technical and financial justifications for changes in cost or scope.
Nordin Ahmad Ismail (PN-Lumut), a retired naval officer, said delays forced the navy to use existing assets to cover the capability gap. He sought firm delivery dates, effective penalties and disclosure of any additional costs for replacement anti-ship missiles and system integration.
“Every year of delay means the navy continues waiting for new assets while maritime security threats do not wait,” he said.
“The South China Sea does not wait. The Strait of Malacca does not wait.”
The entire LCS programme was approved in 2011 for six ships. Its main contract, signed in 2014, was valued at RM9.128 billion.
A 2023 supplementary agreement reduced the fleet to five while increasing the contract value by RM2.099 billion, or 23%, to RM11.227 billion.
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