KUALA LUMPUR: The cabinet will decide whether to reduce the number of littoral combat ships (LCS) from six to five, Defence Minister Datuk Seri Mohamad Hasan said.
Mohamad said the previous administration had agreed to reduce the number of LCS units at the same cost of the original six ships.
"On reducing the procurement to five vessels from six, the details to continue the project will be tabled to the cabinet.
"It is up to them to decide whether (for the number to) remain or to reduce," he told the house during his ministry's winding up speech at the royal address here, today.
On Monday, Mohamad said the cost of the RM9.13 billion LCS project remained the same despite only five ships being built instead of six.
The project came under scrutiny last year when the Public Accounts Committee (PAC) said none of the six ships had been completed although RM6.08 billion had been paid to local contractor Boustead Naval Shipyard.
Mohamad said the decision to reduce the number of ships was decided by the previous government last year.
He said it was necessary for the LCS project to continue to strengthen the nation's defences.
"Since this is a new government, the ministry feels that there is a need to bring the LCS project back to the cabinet and decide whether to continue the project,"he said.
Mohamad said the government was having issues to proceed with the LCS project due to unresolved dispute with a subcontractor.
He said the previous administration had set a condition for the continuation of the LCS project, which was the removal of third-party subcontractor Contraves Advanced Devices Sdn Bhd (CAD).
"In my recent Parliament reply, an international settlement will be made so CAD will not have a role in any projects that include the LCS.
"So one thing is left - the international settlement agreement. However there is a caveat before they (CAD) can sign the agreement but they want a letter of indemnity to excuse them from any wrongdoing.
"That issue is hard for us (to agree) and we will refer the matter to the Attorney-General's Chambers for a decision," he said.