KUALA LUMPUR (Oct 7): Defence Minister Datuk Seri Mohamed Khaled Nordin is disputing the auditor general’s projection that the first of the long-delayed littoral combat ship (LCS1) would only achieve full operational readiness by December 2035.
Khaled said the projection used by the AG is based on the ministry's previous missile arrangement with the Norwegian supplier, whose export licence has been revoked by its government, resulting in the deal falling through.
The ministry is already looking for alternative suppliers as it mulls replacing the naval strike missile (NSM) system originally specified for the ships, he pointed out.
“That is why we believe the projected LCS completion in December 2035 is inaccurate and untrue,” he said when winding up the debate on the Auditor General’s Report in the Dewan Rakyat on Wednesday.
The Norwegian government in May revoked the export licence for the NSM to Malaysia, citing the need to restrict exports of sensitive technology strictly to its allies and closest partners.
Consequently, the original supplier, Kongsberg Defence & Aerospace, was unable to fulfill the deal, which already faced delays previously due to shipyard delays, supply chain bottlenecks and the Covid-19 pandemic.
The AG's December 2035 projection assumes that fresh missile procurement would take 36 months, followed by a six-year supply period matching the original contract’s implementation timeline. The estimate is for the ship to achieve full operational capability, not physical construction alone.
Khaled said other suppliers — South Korea’s LIG Defense & Aerospace, Türkiye’s Roketsan and France’s MBDA — may take about three years to deliver alternative missile systems.
“We are considering all these options, and we will ensure that delivery and installation do not take as long as the Norwegian contract,” he said. Khaled did not announce a replacement supplier or a firm deadline for the first ship to acquire its surface-to-surface missile capability in his speech.
First delivery now postponed to April 2027
Meanwhile, Khaled confirmed that the first ship’s delivery has now been further delayed to April 2027 — as stated in the latest AG's report — and that it would be handed over without the NSM system.
Shipbuilder Lumut Naval Shipyard Sdn Bhd (Lunas) had informed the ministry that outstanding construction, installation and testing work prevented it from meeting its earlier December 2026 commitment, he said.
“Lunas has informed me that it cannot fulfil its earlier commitment and assurance that LCS1 could be delivered in December 2026. Instead, Lunas has given a new date, with LCS 1 expected to be delivered in April 2027,” he said.
A total of six ships were originally slated to be delivered by batches between 2019 and 2023 under the original RM9.128 billion contract signed with Boustead Naval Shipyard — which was renamed Lunas when the entity was taken over by the government from the Boustead group — in 2014.
But by 2022, none had been delivered even though over RM6 billion was paid out, and BNS needed more money to continue with the project. This forced the government to step in to rescue the project, and the fleet was reduced to five ships, at a new cost of RM11.227 billion. As at June 25, the government had paid RM8.557 billion for the ships.
“We are deeply saddened, disappointed and uncomfortable with the delays and the performance of the LCS construction entrusted to Lunas,” he said. “We hope Lunas will have no further excuses or delays."
Not defenceless despite absence of naval strike system
Even without the NSM, which is essentially a long-range weapon designed to detect, track and attack coastal or land targets — it does not mean the first ship would be delivered without any defensive capabilities, Khaled further argued.
The vessel would still have air-defence, anti-submarine and electronic warfare capabilities, and be supported by a combat management system integrating its weapons, radar and sensors.
The navy could also operate jointly with the Royal Malaysian Air Force to address surface threats by using the ship’s detection capabilities to identify a hostile vessel for an air attack, he said.
As at end-August, LCS1 was at 86.39% completion, with overall completion of the five ships edging up to 80.13% from 78.99% as of June 25.
Update on supplementary contracts
The operational capability of the ships also depends on the completion of a slew of supplementary contracts that cover supporting weapons and equipment procurements, which the AG flagged had run far beyond the vessels handover timeline.
Khaled said the contract for the ships' integrated logistics support and trial aids had been signed on Aug 26, allowing the related training of crew and support activities to begin.
Procurement of 57mm 3P ammunition and decoy ammunition for the integrated decoy launching system has now reached direct negotiations, while the letter of acceptance (LOA) for surface-to-air missiles with MBDA France had been signed, he said. The formal contract is expected to be finalised by mid-October.
The estimated completion date for the surface-to-air missiles is May 2032, according to the AG based on the 69-month contractual supply period under the LOA signed on Aug 3.
Khaled, however, did not confirm the revised delivery schedule for those missiles in his reply.
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