Two main decisions cause of LCS scandal - Rafizi

SHAH ALAM - The issue of the littoral combat ship (LCS) project by the Royal Malaysian Navy (RMN) continues to be a hot topic and in the most recent development, PKR Deputy President Rafizi Ramli raised several allegations including the existence of "tangan ghaib” (invisible hands) that had influenced the decision of changing the design of the ship from Sigma to Gowind.

Besides that, the allegation about the main shipbuilding contractor receiving a quotation from a subcontractor prior to the government's Letter Of Appointment (LOA) was also among the things he had questioned.

Rafizi claimed that a Boustead Naval Shipyard Sdn Bhd’s (BNS) internal document that was leaked to him contained a quotation from Naval Group (formerly known as DCNS) to BNS dated Dec 23, 2010.

He also received a quotation document from DCNS dated April 4, 2011 and a Letter of Intent (LOI) from DCNS dated Oct 21, 2011.

"The quotation dates from DCNS (as a subcontractor) to BNS (as the main contractor of the Malaysian government) are very important when we compare it to the timeline of the scandal.

"The LOA from the Malaysian government (through the Defence Minister) to appoint BNS as the contractor for the LCS project was only issued on Dec 16, 2011.

"This means that DCNS has not only received the full information about the negotiations for the construction of the ship, but DCNS has already sent a quotation and had been given the LOI before BNS was appointed as the main contractor," he claimed in a statement on Monday.

Discover the extraordinary

Rafizi said an internal investigation by Boustead Heavy Industries Corporation (BHIC ), which was one of the parent companies that owned BNS, concluded that it was unusual when there was already a quotation from DCNS dated Dec 23, 2010 before the LOA was issued by the government to the company.

"This shows that this contract has been concluded earlier between the vendor (DCNS) and the stakeholders at BHIC or BNS which have the decision-making power.

"The history of DCNS and its corrupt practices of bribing individuals during defence contract negotiations is well known and has become a court case in France after the French authorities raided the offices of DCNS & Thales," he claimed.

Rafizi also alleged that most of the problems that caused the misappropriation and delay of the project stemmed from two main decisions, namely, the change of the ship design from the Sigma class chosen by RMN to the Gowind class (which was rejected by RMN but approved by the Defence Minister).

"Another cause is the appointment of contractors and one-sided contract details that caused losses to the country and RMN,” he claimed.

Rafizi said the issue of the ship design conversion from Sigma to Gowind was the focus of the Public Accounts Committee’s (PAC) investigation.

"The PAC proceedings shows that the Defence Minister at that time (Datuk Seri Dr Ahmad Zahid Hamidi) initially agreed (on May 26, 2011) with the RMN’s choice to use the Sigma design.

"However, two months later, on July 11, 2011, the Defence Minister changed the decision and agreed with the proposal by BNS (the main contractor of the project) to use the Gowind design.

He explained that RMN had chosen Sigma for the sake of the country’s defence as it was of better quality and more modern compared to the Gowind class.

"When Zahid changed the design to the Gowind class, this meant that the capability of the sea defence would not meet the needs and plans of RMN.

"More importantly, both Sigma and Gowind designs involved different subcontractors. The Sigma design, if selected, involves shipbuilding expertise from the Netherlands while the Gowind design involved expertise from France,” he claimed.

Commenting further, Rafizi said there were stakeholders that wanted a subcontractor from France to be selected to supply the design of the ship, although RMN’s decision was for Sigma.

"The subcontractor from France is no stranger to shipbuilding scandals in Malaysia. Finally, the appointed subcontractor is DCNS, which is the same contractor involved in the construction and supply of the Scorpene submarines," he claimed.

He also hinted on the possibility of an interference from a someone whose position was higher than the Defence Minister at that time based on the decision to choose Sigma over Gowind (which was supplied by DCNS).

"That is why I stated before that former Prime Minister Datuk Seri Najib Razak could not run from this scandal.

"The only political leader who has the power to influence the change of ship design and at the same time has a history of relationship with DCNS (through the purchase of the Scorpene submarine) is Najib.

"Secondly, he has a personal record of choosing DCNS (and its partner Thales) for major national projects.

"Apart from the Scorpene submarine project and the LCS project, Thales also sparked controversy in 2012 when it was involved in the light rail transit (LRT) project award scandal to George Kent (a pipe-making company that had no experience building LRT). I exposed this scandal in 2012,” he claimed.