Declassified Investigative Report Reveals Zahid Modified LCS Design Against Royal Malaysian Navy’s Wishes

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Datuk Seri Ahmad Zahid Hamidi (centre), who was also Deputy Prime Minister at the time, decided to go with France’s Gowind design less than two months later on July 11, 2011, after a recommendation from Boustead Naval Shipyard Sdn Bhd (BNS). — Photo by Hari Anggara

KUALA LUMPUR, Aug 17 – Former Defense Minister Datuk Seri Ahmad Zahid Hamidi changed the design of Littoral Combat Ships (LCS) from Sigma to Gowind in 2011, contrary to what the Royal Malaysian Navy (RMN) wanted ).

The report of the Committee of Inquiry into Government Governance, Procurement and Finance (JKSTUPKK) on the Six LCS Construction Project, which was declassified and posted on the Public Accounts Committee (PAC) portal today hui said that Ahmad Zahid initially agreed with RMN’s decision to choose Design Sigma from the Netherlands, after being informed by RMN on May 26, 2011.

However, Ahmad Zahid, who was also Deputy Prime Minister at the time, decided to go with France’s Gowind design less than two months later on July 11, 2011, after a recommendation from Boustead Naval Shipyard Sdn Bhd. (SNB).

According to the report, this happened two days after Ahmad Zahid received a letter from BNS on July 8, 2011 recommending the selection of the Gowind design, before BNS issued a letter of intent to the subcontractor. French contractor DCNS on July 13, 2011 to begin the concept design and design evaluation process.

“The Navy Chief at the time, Tan Sri Abdul Aziz Jaafar, defended his position and always chose the Sigma design from the Netherlands for the construction of the LCS.

“This is clearly stated in the letter from the Chief of the Navy to the Secretary General of the Ministry of Defense on August 17, 2011 and to (then) Prime Minister Datuk Seri Najib Razak on September 7, 2011,” the report said.

The report revealed that BNS was determined to choose the Gowind design because it had prior discussions and negotiations with DCNS to complete the construction of the LCS.

“This can be proven when BNS issued a Letter of Intent to DCNS on July 13, 2011, two days after (then) Defense Minister Datuk Seri Ahmad Zahid Hamidi expressed his agreement with BNS’s recommendation. In fact, BNS also initiated the concept design process with DCNS on July 25, 2011, which was before the original Letter of Acceptance (SST) was issued on December 16, 2011.

“The contractor selection method was contractor-driven and the selection of LCS designs was also based on BNS recommendations and did not take into account the views of the end user who was NMR,” says The report.

The report also details the Department of Defense’s 4/11 Series Equipment and Services Procurement Oversight Committee, which met on August 12, 2011.

It was during this meeting that BNS’s recommendation to select the Gowind design was accepted despite protests from the Chief of the Navy that the department had failed to put the interests and views of the NMR first.

“In his letter dated August 17, 2011, the Chief of the Navy told the Chief Secretary of the Ministry of Defense that the quotation process for the DCNS CSM SETIS had violated standard bidding process practices. international because previously DCNS was not listed in the original five OEMs that were invited by BNS to submit CMS quotes.

“The Chief of the Navy also stated that there were elements of manipulation of the data assessment by the BNS assessment team to give distorted information to the BNS board. produced during the analysis of the BNS evaluation for MS at RMN on July 11, 2011. The technical data for the evaluation was submitted by DCNS two months after the closing date of the CMS quotes,” the report states.

Following this, the Ministry of Defense applied to the Ministry of Finance (MoF) for the issuance of an SST which lays down the design conditions for Gowind and the Setis branded Combat Management System (CMS). as well as 17 equipment and subsystems.

The Ministry of Finance approved the issuance of the SST to the SNB on December 15, 2011 with a contractual ceiling of RM9 billion, the report adds.

Following this, the Ministry of Defense requested the Ministry of Finance to provide an advance of RM1.8 billion, or 20% of the contract ceiling limit, with an advance of RM500 million in 2011, and the remaining advance payment to be made in 2012.

However, on December 21, 2011, the Ministry of Finance only agreed to approve an advance payment of RM500 million to the SNB.

The JKSTUPKK report revealed that the prepayment value in the SST was changed twice, with a second prepayment of RM700 million in 2013 and a third prepayment of RM170 million in 2014. Only RM164.9 million was paid in January. 2014.

“The total amount of advance payment at the SST level is RM1,364,997,803 or 14.95% of the contract value,” he said.

On August 6, Ahmad Zahid dismissed allegations linking him to the mismanagement of the LCS project.

Umno’s president said he was not defense minister when the project was awarded and only held the portfolio from April 2009 to May 2013.

“Those who failed in the procurement of the LCS must be held accountable and they must explain the matter to the Public Accounts Committee (PAC).

“It is to support the revelation of the delay in the delivery of the project,” he said. Umno online.

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