KUALA LUMPUR (Aug 22): The Public Accounts Committee has called on the Cabinet to order that further forensic audit be carried out by Boustead Heavy Industries Corp Bhd (BHIC) on the littoral combat ship (LCS) project that was awarded to Boustead Naval Shipyard Sdn Bhd (BNS), following the release of BHIC's forensic audit report on the project.

This is so that all transactions and activities related to the implementation of the project and letters of award (LOAs) from 2015 until now would be looked into, as the current LCS audit report is based on the audit mandate from the financial years 2011 to 2014, according to PAC chairman Wong Kah Woh in a statement Monday. 

"Although most of the letters of award (LOAs) were issued by BNS (Boustead Naval Shipyard) during this period, the  implementation was until at least 2018. The report found that as long as all transactions and activities related to the implementation up until 2018 have not been investigated in depth, it is possible that important facts to prove criminal conduct would be ommitted," said Wong.

The PAC also wants the Cabinet to make public an investigation report on the contract for six offshore patrol vessels that was also awarded to BNS to be made public.

"Given that the issue of use of LCS allocation for the payment of NGPV (New Generation Patrol Vessel) bad debts by BNS, the governance, procurement and finance investigation committee's report on the six patrol vessels (NGPV), the Integrated Logistics Support and Commercial Package Programme by the Royal Malaysian Navy should also be declassified," said PAC chairman Wong Kah Woh in a statement Monday.

The Edge Malaysia, in its publication for the week of Aug 15-21, reported that shortly after BNS took over PSC Industries Bhd, the company that privatised the Lumut naval dockyard for RM300 million in 1995 despite the Navy's objections at the time, was awarded a contract to build 27 offshore patrol vessels for an estimated RM30 billion. 

The contract to build the first batch of the 27 — comprising six vessels — for RM5.35 billion was awarded to PSC-Naval Dockyard Sdn Bhd, the new name of the privatised dockyard, in 1998.

Boustead group took over PSCI, which ran into financial troubles shortly after the contract was awarded, in the second half of 2005. By end-2006, the government had to inject another RM1.4 billion into the contract, which was then known as the NGPV project, raising its value to RM6.75 billion. The dockyard at the time had been renamed Boustead Naval Shipyard Sdn Bhd.

The declassified LCS forensic audit report can be accessed here.

Read also:
BNS held 'rights' to build 15 more patrol vessels 

LCS forensic report: Vendors were chosen before Malaysian govt issued LOA 

LCS: Evidence of irregularities, lack of proper governance gathered as early as 2010, says Audit Report 

LCS project: BHIC faces RM890m loss from double claims, dummy payments and overlapping LOAs