Government throws a lifeline to continue littoral combat ship project

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Launching of 1st ship of the class, the Maharaja Lela (2501) in 2017. The ship remains uncompleted.

The Littoral Combat Ship (LCS) project, part of the Bousted Group project, has been delayed since 2019 but has been given the orders to go ahead with conditions attached that must be adhered to by the company.

The announcement came from Senior Defence Minister Datuk Seri Ismail Sabri Yaakob who proclaimed it was decided at the Cabinet meeting on Wednesday.

The continuation of the construction could save the jobs of 1,600 workers, mostly local people and more than 400 vendors comprising Bumiputera SMEs.

Datuk Seri Ismail Sabri Yaakob said if the construction of this LCS is not continued, the negative impact on the workers and the Bumiputera vendors involved could be disastrous.

“It will also affect the Armed Forces Fund Board which is a shareholder in Boustead Holdings Berhad,” he said in a statement here tonight.

Ismail Sabri said if the project was not continued, the flow-on would indirectly affect many contributors including military personnel and the bank that gave the loan to this project would also suffer losses, because Boustead Naval Shipyard cannot afford to pay the loan.

The comments come after the Ministry of Defence had conducted an in depth investigation on the failure of the subsidiary of Boustead Holdings Berhad which is Boustead Naval Shipyard Sdn Bhd (BNS), to supply six LCS for the Royal Malaysian Navy.

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