LCS scandal: Report reveals Zahid involved in procurement process

KUALA LUMPUR: The report on the controversial Littoral Combat Ship (LCS) project by the Special Investigation Committee on Public Governance, Procurement and Finance (JKSTUPKK) revealed that Datuk Seri Dr Ahmad Zahid Hamidi was involved in the procurement process.

Zahid, who was defence minister at the time, had denied last week that he was involved and said it was unfair to blame him for the LCS procurement fiasco as the project was awarded after his time in the ministry ended in 2013.

The report included evidence in the form of a letter sent by Boustead Naval Shipyard Sdn Bhd (BNS) on July 8, 2010 to Zahid asking for a letter of intent on the LCS project.

The letter carried Zahid's handwriting that said "sila laksanakan" (please get this done) as well his signature and stamp as the defence minister.

According to the report, which was finally made public today, Zahid had changed his mind in 2011 on the design of the LCS from the Sigma-class built by Dutch company Damen Group to the Gowind-class by DCNS of France, now known as Naval Group.

This went against the wishes of the Royal Malaysian Navy (RMN).

The report said the procurement of the project was "contractor-driven", which was done through direct negotiation.

"This is evident as, since 2007, BNS had repeatedly submitted letters of requests to Mindef (Defence Ministry) for a letter of intent (LoI) to be issued to start the planning and building of the LCS based on the 1995 privatisation agreement.

"BNS had also met the (then) defence minister (Zahid) aside from sending several letters to the prime minister (Datuk Seri Najib Razak), deputy prime minister (Tan Sri Muhyiddin Yassin), finance minister (Najib) and the defence minister.

"The probing committee found that Mindef had agreed to BNS's recommendation in choosing the Gowind design as agreed by the defence minister in a letter to BNS dated July 11, 2011.

"This decision was against Zahid's previous stand where he initially was of the same opinion as the RMN (the end-user) who had chosen the Sigma design," the report read.

It was revealed that BNS was adamant in choosing the Gowind design after the company held a discussion with DCNS.

The report said this was evident through an LoI submitted by BNS to DCNS on July 13, 2011, two days after Zahid expressed his agreement to BNS's recommendation.

"In fact, BNS had also begun the conceptual design process with DCNS on July 25, 2011, which was before the original letter of acceptance was issued on Dec 16, 2011.

"The method of choosing the contractor which is the contractor-driven (method) and the fixing of the LCS design was made based on the recommendation by BNS without taking into account the views of the end user which is RMN."

The report said BNS was supposed to select the partners and design options before Jan 31, 2011.

"However, BNS failed to make the selection and issue it to the RMN during the duration provided."

Most Popular
Related Article
Says Stories