Malaysian combat ships scandal: ‘Navy fought a losing battle’
The six littoral combat ships were supposed to be delivered in stages, with the last one scheduled for 2023, but today, not a single ship is ready.
When Royal Malaysian Navy (RMN) Chief Admiral Tan Sri Abdul Aziz Jaafar was about to retire after serving for 40 years, he was offered the plum job as the executive deputy chairman/managing director of Boustead Heavy Industries Corporation (BHIC).
The highly respected career officer did not have to think twice.
He said no to the tempting offer, which would have included a remuneration of over RM80,000 a month and other perks.
“I refused. I was offered to take over from (Tan Sri Ahmad Ramli Mohd Nor). I refused and I said no. I did not want to go and eat my (word/decisions earlier),” he told the Public Accounts Committee (PAC).
It was clear from the testimony by Abdul Aziz, 66, that he made the decision because many of the actions by Boustead Naval Shipyard (BNS), a unit of BHIC, was allegedly against the interest of the navy.
Ahmad Ramli, a former navy chief, is one of the two names implicated and mentioned repeatedly in the PAC report on the RM9bil littoral combat ships (LCS) scandal.
The other is Anuar Murad, a former navy captain, whose name was mentioned 23 times in the PAC report.
He was the BNS’ LCS programme director.
In the 247-page report, Abdul Aziz said he had written 10 letters, including to the then prime minister Datuk Seri Najib Razak and then Defence Minister Datuk Seri Dr Ahmad Zahid Hamidi, as well as to the Chief Secretary to the Government and the secretaries-general of the Defence Ministry and the Treasury.
None of them, he said, bothered about his incessant protests.
Abdul Aziz’s main grievance was RMN’s objection to the design of the ships as he felt the navy, as the end user, should have a say but his views were ignored by the contractor, BHIC, which was supposed to build the six LCS.
The six LCS are supposed to be delivered in stages, with the last one scheduled for 2023, but today, not a single ship is ready and RM6bil has been paid to BNS.
In his testimony before the PAC in 2021, Abdul Aziz said RMN fought a “losing battle, right from the start” with “Boustead (BNS) given the leeway to choose what was right for themselves”.
The core of the dispute is that RMN had wanted the Sigma design of the LCS by a Dutch firm and the combat management system (CMS) from a French firm but following intense lobbying, BNS had opted for the Gowind design and the SETIS CMS – both from France.
Abdul Aziz said he felt “very dejected” as it was claimed then that Ahmad Zahid had agreed to Gowind-SETIS but he had not seen any letter from the then minister expressing preference for Gowind-SETIS.
Ahmad Zahid is said to have earlier agreed to the Sigma design.
“The French design was not a proven design while Sigma was already operational in Indonesia, Morocco and a few other countries,” he said, adding there was also a lost opportunity as the builder had wanted to make Malaysia its hub.
The Gowind design is by France’s Naval Group, formerly DCNS, which had also built the controversial Scorpene submarines in 2002 for Malaysia.
Abdul Aziz said: “We had bad experiences with the French, especially with the submarines. I did not want to tell the government that we have been cheated but short of saying it, there was some element there. If anybody were to be in my position, I say you must be ready.”
Although he felt “something gravely wrong” from the beginning, Abdul Aziz did not issue any statements externally but declared that the PAC was the best opportunity to say, “I have registered my greatest disappointment to everyone that was supposed to be listening to me”.
“If I were to build a house, if I say I want that, you will get it done. Betul atau tidak? (Right or not?) The fact that happened (was) the other way around, jelas menunjukkan bahawa tidak telus, (it just shows that it’s not transparent,” he said.
In his testimony, Abdul Aziz also asked to be put on record that he had called for an investigation into Contraves Advanced Devices Sdn Bhd (CAD) – one of the two companies appointed by BNS as main contractors for the LCS project. The other is Contraves Electrodynamics Sdn Bhd (CED), in which BNS has 51% stake with the foreign Rheinmetall Group having the other 49%.
The testimony by Abdul Aziz is serious as he has a shiny 41-year journey as a naval officer, including seven-and-a-half years as RMN chief.
He was enlisted into the RMN in 1974 soon after graduating from the Royal Military College in Sungai Besi.
Among the milestones Abdul Aziz had achieved were serving on board nine operational ships at sea, including commanding three of them.
He was also part of a commissioning crew for four RMN ships – the fast-attack craft KD Paus at the Hong Leong-Lurssen Shipyard in Butterworth, Penang, in 1976; the multipurpose command and support ship KD Seri Indera Sakti at Bremen Vulkan Shipyard in Bremen, Germany, in 1980; the corvette KD Kasturi at HDW Shipyard in Kiel, Germany, in 1984, and the missile corvette KD Laksamana Muhammad Amin at Fincantieri Shipyard in La Spezia, Italy, in 1999.
On page 80 of the PAC report, in an apparent reference to Ahmad Ramli, Abdul Aziz said there were many proposals made by the navy regarding 17 main management systems – 10 were agreed and seven disagreed by BNS.
“So I said ‘My God.’ Short of telling him, ‘Being an ex-navy, beliau ini (this person), you are not helping the navy at all,” he said.
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