Destini's failed OPV Project and Boustead's failed LCS Project

Everybody is talking about Boustead Holdings, BHIC and Boustead Naval Shipyard on the devastating failure in the construction of the 6 LCS ships, worth RM6 Billion. It is all over the news. However, investors and public are not aware of the other RM1 Billion ship construction project failure involving Destini Berhad, Destini Shipbuilding and Engineering Sdn Bhd and THHE-Destini Sdn Bhd. Destini has failed to deliver its NGPC Number 6 ship, after the government has bent over backwards to accept 5 x NGPCs with significant problems. Now a larger problem is being faced for their 3 x OPV ships; the OPV1 was supposed to be delivered in Feb 2020, OPV2 in May 2020 and OPV3 in Aug 2020. All are late, due to mismanagement of funds at Destini Berhad. Similar case like LCS, funds are taken out by the Top Bosses for own agenda and the blame continues to be given as "donations to political parties and politicians".  Come to think about it, it is true as they are “politicians”, so they remove the funds for themselves. 

Genuine vendors continue to suffer, and many at the brink of bankruptcy. Investors like me and my colleagues are cheated many folds, when correct news are not being shared to/among us. Why many folds? Simple examples as follow. Investors invest in the shares of Destini and Boustead, faced mismanagement of funds by unscrupulous Top Management. Investors invest in the vendors, get screwed by the same Top Management, vendors either don’t get paid or paid very late or suffer massive additional costs due to late payment by the shipyards as the main-contractors. Please bear in mind in both cases of Boustead and Destini, Government has paid them promptly. In fact, Government has been questioned on possibility of over-payment.  The fact still remain that the hundreds of vendors still face payment issues, albeit “friendly crony” vendors gets paid handsomely and on time. The middle management of both organisations enjoy fat salary for being fat, dumb and happy.. not doing anything under the pretext that the project is at standstill due to insufficient funds.

To make matters worse, both Boustead and Destini are asking for capital injection, Extension of Time and excused from paying Liquidated Damages. Who gets to gain? Obviously the Top Management who will continue to behave the same whilst the vendors will continue to be screwed. Government continues to be blamed and screwed by the same “selfish individuals” having to fork out more money,that belongs to the public. Ultimately, innocent Malaysian citizens also get screwed. From history, what is the guarantee that these “selfish individuals” would actually complete the project? Why should they be given more chances when other shipyards and organizations have been chasing for their first opportunity but never given.

The shit hit the fan when MSM took Boustead for winding-up of Boustead Naval Shipyard, having exhausted all means of discussion. https://www.klsescreener.com/v2/announcements/view/3253681 . Otherwise it may have not been taken seriously by Boustead Holdings, LTAT, the Government and the public. Now it’s in the papers, so no way to avoid.  Similarly on Destini, I was also informed by Destini’s internal sources that the same winding-up petition has been filed by a vendor since September 2020, without any action by Destini to discuss and negotiate on a payment plan. Destini is obligated to inform KLSE but have failed to do so, without any action taken by anyone. Investors will continue to be screwed when crucial information like this is not shared by Destini as they are obliged to do. To make matters worse, there is already a “rescue plan” formed by the same leaders of Destini along with “their partners in crime” within THHE, to assist Destini’s head honchos to exit with a another big fat bonus “cash out”. Who gets screwed now? Investors including supposedly cash rich MOF as the owner of Urusharta Jamaah. Again, innocent citizens gets screwed left, right and centre. Urusharta Jamaah has just been assisted by Petronas (https://www.theedgemarkets.com/article/th-heavy-engineering-out-rough-waters) to help THHE survive, and for what? So that they are ready to be screwed again?

As you can see the similarities between both projects, same issue, just different scale of disaster.  Sad to say, both already involved billions and will continue to incur billions more if nothing is done seriously to curb the problem.

We do hope that with the elaboration above, the relevant authorities including KDN, SPRM, MOD, MOF, KLSE and others would no longer hide but to take the necessary action to protect the innocent parties including the vendors, investors and the citizens at large as the ultimate contributors to the coffers. Allow talented, experienced, Non-political affiliated (proven clean) Shipbuilding, Shiprepair and Ship Maintenance professionals to manage the projects with support of experienced lawyers, accountants, engineers and former military officers at the board level. Putting individuals without Shipbuilding, Shiprepair and Ship Maintenance at the helm, is like relying on the great Michael Schumacher to drive an Oil & Gas Company as good as he drives his F1 car.  Are you kidding? What else needs to be done to make everyone realize this simple philosophy?

 Author: CheatedInvestors

Publish date: Mon, 09 Nov 2020, 12:22 AM

Defense Maritime Industry In Malaysia : just how bad is the situation ?

Defence Industry

In dialogue and survey session by KPMG involving more than 20 MIDES and VDP companies in February 2021, the most number of complaints submitted was the dire state of the ecosystem. This is as a result of the postponement of the LCS Project and nearly 3 -year -old debts that have not yet paid by BNS. Many of the vendors are in a danger zone due to pressure to clear outstanding payments from suppliers, banks, and government authorities.

MASTRA calls upon the Ministry of Defence Malaysia and the ministry of Entrepreneurs and Cooperatives Development to look into the plight of the entrepreneurs, vendors, and SME's affected by the alleged non-payment. While the government’s efforts in reviving the LCS project are commendable the sustainability of the SME’s must be included in the equation. MASTRA proposes that direct payment to the SMEs be made a precondition of the revival plan.

STRIDE ought to be  under Markas BERSAMA , looking after the interest of all services of MAF , with representative from APMM and Marine Police. Restructure and Reassign STRIDE  for a wider scope of responsibility and accountability. Perhaps jointly with BIP . It must be properly organised with separate  Divisions taking care of Aeronotics, Marine and Automotive. include a 'Proactive' Division for Defence Industry . 

Participations headed by Veteran Senior Officer from Engineering Branch of the  TD, TLDM or TUDM, with council members representing the industry in  Automotive, Marine and Aeronautical Services. 

According to internal sources, STRIDE has no fund to do R&D, past develop project management and events led to loss of confidence in STRIDE's capability in managing innovations , hence sceptics to provide funding.

STRIDE should not continue as the old Defence Research Centre (PSTP) - more for fuel oil and material test labs!

 

Maritime Industry

MiGHT ought to Review and Audit their Maritime Strategy for 2020 that was published in 2011. They should identify  progress and more importantly shortcomings of the strategy up to this date and propose viable solution through Direct Interaction with in-country marine  technology practioners , and ONLY move forward from there  with  more practical and achievable steps . There were too much Way Forward ! yet if still sluggish to 'MOVE FORWARD' ,  it will not take our National Marine Technology Competencies and Sustainability to ANYWHERE ! So much were left out or ignored, at least over the last decade!

MASTRA suggest there a must change the KPI mentality to PDCA mentality in these agencies, besides Improve Governance. Their role is also governance , Tighten requirements for made in Malaysia and Malaysian products. This must Reflect in tender specification, Encourage integration and systems production.

Maintenance contracts should be given to 100% locally owned companies to promote and strengthen self-reliance. Clean up licensing and registrations. Clean up GLCs. Close the non-strategic collaboration. 

At a time when our ecosystem in bad shape we need to do the needful.

 If OEM still required, they must go through local 'technologically related and competent' companies.

We are aware of the problems exist, so how do we counter this or manoeuvre ourselves in this ecosystem ?

For more almost 15 years since our involvement in the industry in AMIM in 2006, we keep seeing plans after plans being launched by VVIP and yet our industry remains almost as 40 years ago. All these seminar, conference and workshop nicely done and presented documents are just for KPI or show only.

Perhaps the Ministry taking care of Technology. Development and Sustenance , such as MOSTI, and Ministry responsible for survival and progress of SMEs , perhaps MITI, are not fully aware, or indifferent,  on the plight of  Malaysian Marine  Industry ?

from defence industry brain storming group

1st Boeing P - 81 Maritime Patrol Aircraft for India

SEATTLE, May 15, 2013 – The first Boeing [NYSE: BA] P-8I long-range maritime reconnaissance and anti-submarine warfare aircraft arrived today, on schedule, at India Naval Station Rajali. The P-8I is one of eight aircraft Boeing is building for India as part of a contract awarded in 2009.   

“Boeing is proud to deliver this advanced aircraft to meet the Indian Navy’s unique maritime patrol requirements,” said Chris Chadwick, president of Boeing Military Aircraft. “The P-8I team, which includes our customer and Indian suppliers, has done a fantastic job working together, and we’re on track to deliver the next two P-8I aircraft later this year."

Based on the Boeing Next-Generation 737 commercial airplane, the P-8I is the Indian Navy variant of the P-8A Poseidon that Boeing is developing for the U.S. Navy. The P-8I incorporates not only India-unique design features, but also India-built subsystems that are tailored to the country’s maritime patrol requirements.