Shortly after the PAC Report on LCS was tabled, a reporter friend texted me, asking “How did you feel?”
I replied: “ – ”.
We have conducted 10 proceedings including a site visit at BNS Dockyard in Lumut, calling 21 witnesses altogether. Eventually a Report of 247 pages, together with the 489-pages-hansard and 192-pages-slides were tabled as the full report.
The PAC decided to visit BNS Dockyard after getting evidence from KSU MINDEF, witnesses from BNS and Former Defence Minister DS Zahid Hamidi.
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We have reached the dockyard at 9am @ 11 December 2021. The proceeding started at 9.05am with the presence of the witnesses from MINDEF, Navy, BHIC and BNS. To name, the 3 important witnesses were the CEO of BHIC, Sharifuddin Md Zaini, the BNS LCS Project Director Kepten(B) Ir Azhar Jumaat and the former Navy Project Team Head Lak. Muda Datuk Ir. Mohd Shaiful.
The proceeding lasted exactly 3 hours, ended at 12.01 noon, and everyone proceed for the site visit.
The PAC was first brought to visit the warehouse. There are altogether 13 stores at the warehouse keeping LCS related equipment, 5 of which specifically for LCS equipment and the rest of 8 are BNS General Store that have a mixed LCS and general equipment.
We visited a few stores. There are parts for ammunitions, there are parts for ship buildings, and so on. Notably, there are some packages of Smart TVs, yes for the use of LCS, and kept in the store. We all know Smart TVs will no longer that smart after a few years.
I am not too sure about others, particularly those parts that involve the technology of the war ship. We checked, a lot were bought way back in year 2013, 2014 and 2015. A question in mind is whether the same will still be “smart” enough for the current needs with the advancement of technology day to day.
We were told the total equipment value on storage is RM1,757,791,266.02. I asked BNS how much of it has become obsolete, the answer given was approximate 15%. Meaning an approx. RM263,668,689.90 loss.
Has all the equipment been paid by BNS? No, not all has been paid. That is why we can read there are huge debt owing to the OEMs which had eventually caused the stop work and stop supply.
We were then brought to visit LCS1 at the construction site. Looking at the outfit one will not be able to tell that was the same warship that was “launched” in 2017. But we know it is. Of course the much disputed mast is no longer there.
We went up, went into the main block, to see the progress of the actual construction. MINDEF informed the PAC that the progress of the actual construction is 44% for LCS1.
We spent around 1 hour in LCS1 and went to the bus. The bus did drive us past the whole construction site for LCS 1 to LCS 5. There are no longer workers at the construction site, no local and no foreigner. No contractors. No longer any on-going works. Totally zero, totally stalled. It is heart-breaking, as we all know RM6 billion was already spent.
In the earlier proceedings, we were told BNS’ financial position is in dire straits due to financial mismanagement of the Company.
The PAC Member YB Wong Shu Qi asked whether all RM6 billion had been spent by BNS. CEO BHIC Shariddin admitted “memang duit kita sudah habis… company memang tidak ada duit dan memang akan lingkup pun besok silap-silap.” Staff salary were cut since October 2020, EPF not paid since May 2021. BNS is merely relying on some small jobs like repairing for TLDM to survive. (Pg 49 Hansard)
Sharifuddin further informed the PAC, if BNS is gone, Boustead Holdings and LTAT will be affected severely. Plantations, Pharmaniaga, Boustead Properties and Boustead Hotels all will be affected. It will go as far as LTAT losing up to 46% of the fund size. (Pg 52 Hansard)
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It is sad, and really sad. Heart-breaking. First thing my mind, how could a company having a RM9 billion contract from the Government, come to this stage? It is more than mismanagement. It is more than poor management. Something is gravely wrong, with those who were in power and those who got the Contract.
I hope the PAC Report on LCS can help the nation, by serving as a definitive textbook on how NOT the defence procurement should be conducted, how NOT the power and process be abused. The absorbing horror story in the whole process of LCS Project shall serve as a lesson to all those who are in power, now and future.