Politicians demand Putrajaya explain RM9b nod for six patrol ships

By Debra Chong
The Malaysian Insider
Dec 18, 2011

KUALA LUMPUR, Dec 18 – Datuk Seri Najib Razak must justify his government’s purchase of six patrol ships for a whopping RM9 billion, an increase of RM3 billion from the original RM6 billion approved earlier this year, DAP’s Lim Kit Siang demanded.

The opposition politician rang the alarm after a local shipbuilder said it won a RM9 billion “letter of award” from the Defence Ministry late last Friday.

Lim said the PM had promised full transparency in government procurement projects and must now take responsibility and explain the price hike. — file pic“Boustead Naval Shipyard Sdn Bhd had received the Letter of Award dated 16 December 2011 from the Ministry of Defence Malaysia for the Contract to design, construct, equip, install, commission, integrate, test and trials, and deliver six units of ‘Second Generation Patrol Vessels Littoral Combat Ships (Frigate Class)’.

“The Contract carries a ceiling of RM9.0 billion, to be implemented over three Malaysia Plans, 10, 11 and 12. The delivery of the First of Class ship is estimated in 2017 with follow on ships every six months thereafter,” Boustead Heavy Industries Corporation Bhd (BHIC) said in a filing to Bursa Malaysia.

Lim said the prime minister had promised full transparency in government procurement projects and must now take responsibility and explain the price hike.

“Justify the increase. Was the contract open to tender? The basic rules of integrity and accountability should be followed,” the Ipoh Timur MP told The Malaysian Insider when contacted.

Former Umno minister, Datuk Zaid Ibrahim, echoed Lim but directed his questions to Datuk Seri Ahmad Zahid Hamidi, the Minister of Defence.

He said it was very unusual for a contract to be couched in terms such as “a ceiling of RM9 billion”.

“How can you have a contract of up to RM9 billion? What happens if they exceed that amount?” he said to The Malaysian Insider over the phone last night.

“That’s not a contract in law. At most, that’s a letter of intent. In a contract, you must spell out the specs. But here, it seems the equipment has not been evaluated … the whole system is not finalised. That means they are not sure what it is they are buying,” he said, with a little laugh.

Zaid said Boustead’s statement was “very misleading”, adding that the deal was an attempt to “bulldoze through a contract … that would strengthen the commission for DCNS, the French company”.

The naval defence company hit headlines worldwide for its Scorpene submarine deal with Putrajaya, which was also linked to the murder of a Mongolian model, Altantuya Shaariibuu. It was recently investigated by French authorities.

“It’s a fait accompli [French for an accomplished fact],” the one-time de facto law minister said.

The government had approved RM6 billion for the navy to spend on the six ships, DAP national publicity chief, Tony Pua said, in a reminder of Ahmad Zahid’s announcement to Parliament on February 5.

The Petaling Jaya Utara MP said the defence minister had claimed the six patrol ships were “littoral combatant ships (LCS)”, which Pua said meant advanced warships, noting that only the United States owned two such vessels in the world.

He said the minister also claimed the ships were bigger, faster and equipped with “three-dimensional warfare equipment like cannons, missiles and torpedoes” and sophisticated sonar detection systems that would help the navy protect Malaysia’s maritime areas.

“The minister must explain why has the price for each ship increased by RM500 million or RM3 billion in total for the six ships suddenly, well above the original approved budget.

“For example, has the specification for the ships been ‘improved’ further since Datuk Seri Zahid’s reply in Parliament?” he asked, in a media statement today.

Pua said that Boustead, previously known as PSC Naval Dockyards, had in the past delivered six naval patrol vessels at RM6.75 billion or 26.2 per cent above the original contract price of RM5.35 billion.

He added that the shipbuilder was two years late in delivering the ships, which he said had “hundreds of defects”.

Pua highlighted that the Auditor-General had given the Defence Ministry a poor report in 2006 when it was helmed by Najib, saying the ministry had awarded deals to dubious contractors and had overpaid contracts but had no paperwork to show for it.

“Such a track record does not give Malaysians any amount of confidence that history will not repeat itself,” he said and questioned if Ahmad Zahid could assure the public there would be no repeat of such incidents.

He said: “These leakages must be plugged to ensure that the country doesn’t become bankrupt by 2019 as speculated by Minister in the Prime Minister’s Department, Datuk Idris Jala”.

  1. #1 by yhsiew on Sunday, 18 December 2011 - 3:53 pm

    Such hanky-panky deal with complete lack of transparency will accelerate outflow of illicit funds. They are treating taxpayers money as their grandfather’s money.

  2. #2 by Loh on Sunday, 18 December 2011 - 7:18 pm

    ///Lim said the prime minister had promised full transparency in government procurement projects and must now take responsibility and explain the price hike.///

    Promises are dependent on the honesty of the person who gave it. That is called word of honour. The person who gives the word must have the honour. He is morally bound to keep that promise. When a person lacks moral, the words of honour are just words without honour. Words are useless when there is no honour attached.

    Razak promised that NEP was for a fixed period of 20 years. Razak died before he could honour his words. But would he have honoured it had he lived? One takes the children as the persons who should be responsible to honour the words of the father or the mother. Of course sometimes the children did not have the capacity to honour the words of the parents, and we curse the person for producing useless children who have no capacity to honour his words. But in the case of NEP, Najib as the prime minister has the capacity to honour the word of his father, both as the son as well as the President of the party in which capacity the promise was made. The issue is not a case of inability; for Najib it is a case of not willing to honour the promise. When the son does not wish to honor the words of is late father, not because he was not able, but because he has vested interest, it shows that the person cannot be trusted to honour his words when vested interest overtakes his interest to honour his words. All told, Najib cannot be trusted.

  3. #3 by ENDANGERED HORNBILL on Sunday, 18 December 2011 - 8:45 pm

    We can all wait till the cows come home and Putrajaya will not explain.

    We all know the cows never went home. They ended up in some Bangsar condominium.

  4. #4 by Cinapek on Sunday, 18 December 2011 - 11:54 pm

    Expect the PM and Govt to maintain an elegant silence.

    All that needs to be done is to follow the money trail. GE13 is coming soon and the BN war chest needs to be replenished if the doctrine of “lu tolong gua, gua tolong lu” is to work. A lot of handouts need to be made. Warloads need to be “kautim” to ensure their support and no sabotage. At grassroot level, palms need to be greased and funds for “jerseys and football boots” need to be dispensed at kampung ceramahs.

  5. #5 by monsterball on Monday, 19 December 2011 - 2:19 am

    It’s always willing buyer…willing seller…no corruptions and Boustead is owned by UMNO b cronies…..no more a British noble company.
    I am sure if Mr. Boustead is alive…he will be so sick to see his name down to the drain by UMNO b crooks.

  6. #6 by k1980 on Monday, 19 December 2011 - 2:54 am

    //purchase of six patrol ships for a whopping RM9 billion, an increase of RM3 billion from the original RM6 billion//

    The new price takes into account gold-plated toilet bowls for the ships’ crew, plus diamond-encrusted steering wheels and propellers

  7. #7 by Godfather on Monday, 19 December 2011 - 7:59 am

    What you need to find out is how much is paid upfront. These ships are to be delivered in 2017 and beyond, so technically no payments except for a maximum 10 pct downpayment should be made. However, we can safely say, based on the Amin Shah experience that the contract will be front-loaded and billions are likely to go out of the door very soon.

  8. #8 by Godfather on Monday, 19 December 2011 - 8:01 am

    We will soon find out that the contract for APCs given to DRB Hicom would also have a hefty increase to be paid upfront. All clear signals in fundraising for the coming GE.

  9. #9 by undertaker888 on Monday, 19 December 2011 - 8:28 am

    its easy to break it down. Here you go.

    Cost of bare boats – 2 billion
    Najis radar system – 2 billion
    Moohidin 1000hp twin engines – 1 billion
    Ahmad Z supersonic torpedoes – 1 billion
    Mamak anti-mine anti-sub anti-semua boleh system – 1 billion
    RoastMama 5 gallons barrel depth chargers – 1billion
    Adullah B navy business class F&B services- 1 billion

  10. #10 by waterfrontcoolie on Monday, 19 December 2011 - 8:28 am

    cintanegara, why are you keepin a dead silence on such issues? PKFZ, Submarines’ commission, Cow-gate, 9BIOS, I malaysia building, and now these patrol boats. Anyway, I thought Amin Shah is already captaining some of those boars we purchased under the Super-Ego? WQhat happened? Already converted to submarines under the Malysia Boleh project?

  11. #11 by k1980 on Monday, 19 December 2011 - 8:52 am


    Taxpayers can say goodbye to their RM890,000 because “It is not fair for the family to settle the loan..”

    Then go after the guarantors of that loan! Does it mean that should Shareezok absconded on that RM250,000,000 loan, no one in her family will need to repay the loan ?

  12. #12 by chinkimwah on Monday, 19 December 2011 - 10:31 am

    Dear Kit, please look into 9Bio In FMT. Another scandal similar to NFC.

  13. #13 by monsterball on Monday, 19 December 2011 - 11:11 am

    Cows …submarines…corrupted acts…buy high prices…sell at a loss.
    They must steal… steal …steal…some for party…some for their pockets.
    It is an incurable disease…..and Cintanegara knows that too well.
    So quiet…feeling guilty.
    Wait for extra money fall into his lap.
    Then he will talk nonsense again…for he got the crumps from the bread and feeling happy.
    Few hundreds can buy guys like Cintanegara…while billions are stolen…and from him too.
    He does not know or refuse to know.
    Is he a god fearing fella?

  14. #14 by k1980 on Monday, 19 December 2011 - 1:10 pm


    Will the National Feedlot Corporation go bust into the thin air (like Al-Tantuya’s dna) similar to the RM68,000,000 Malaysian Wetlands Foundation in 2007?

  15. #15 by k1980 on Monday, 19 December 2011 - 1:15 pm

    Chain all the Johor zoo directors and staff in one hundred degrees heat for 48 hours.


  16. #16 by PoliticoKat on Wednesday, 28 December 2011 - 8:03 am

    Hey, you know what, the Nimitz-class nuclear aircraft carrier cost only USD4.5 billion (about RM13 billion). Add a little more to that RM9 billion which we are spending on a six patrol ships, and we can get ourselves a nuclear aircraft carrier!

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