Politicians demand Putrajaya explain RM9b nod for six patrol ships

(The Malaysian Insider) – 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.

“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 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.