MP’s allegations over ‘high cost’ of ships

Defence analysts have rubbished allegations by an opposition MP that the Government’s move to procure six Littoral Combat Ships (LCS) costing RM6bil, costs 870% more than what other countries paid for similar ships.
Defence and security analyst Dzirhan Mahadzir said the comparison made by DAP’s Petaling Jaya Utara MP Tony Pua in a local news portal was based on different ships.
“The government amount is within a reasonable estimate of how much it will cost with the capabilities of the SGPV-LCS (Second Generation Patrol Vessel-Littoral Combat Ships),” he said yesterday when asked to comment on Pua’s statement on the website.

Sophisticated machine: A concept model of an SGPV displayed by Boustead at Lima 2009. Defence analysts say the high cost in procuring the six ships was rational. — Photo courtesy of Dzirhan Mahadzir

Sharing a similar view, Asian Defence Journal editor M. Ghazemy Mahmud said the high cost in procuring the six LCS was rational, taking into consideration the capability and sophistication of the ships.
“Although the vessels were based on the corvette design, they are known as LCS and the equipment is far more sophisticated, capable than and superior to the earlier six Offshore Patrol Vessels (OPVs), hence the higher cost,” he said.
Ghazemy said due to the complicated and complex nature of building the naval ship, it was easy to be confused over the actual cost and type of naval ships.
“The figure (RM6bil) is standard ballpark figure in the naval ship building industry. Only those in the industry can understand the complex nature of naval ship-building,” he said.
He said the procurement was part of an overall programme planned more than a decade ago where the Royal Malaysian Navy (RMN) wanted to built 27 corvette-type warships to replace the British-made patrol vessels bought in the 1960s and 1970s.
On the issue of the purchase of the vessels not being made through competitive bidding compared to other developed countries, Dzirhan said Pua had got the facts wrong.
Dzirhan, a correspondent for Jane’s Defence Weekly, said RMN chief Tan Sri Abdul Aziz Jaafar had earlier said the ships would be built by the Boustead Naval Shipyard, in collaboration with one of the six overseas shipyards which was shortlisted.
“The RMN requested for quotations and proposals solicited from foreign companies at the Langkawi International Maritime and Aero­space Exhibition in 2009.
“In fact, this fact had been reported several times since then, and the Government was looking at the various foreign proposals.
“Also, similar examinations of quotations and proposals were being conducted on the ships’ weapon systems, radar, electronic equipment and sensors, all of which would be sourced from various foreign suppliers,” he added.
He said however, all these were conducted behind closed-doors, “not just because the Government wants it so, but also because the companies do not want disclosure of their proposals and offer prices to be available to their competitors.”
Dzirhan said the experience in building the ships and the transfer of technology and expertise would allow the local defence industry to develop capabilities to meet the Government’s goal of self-sufficiency in defence.