PETALING JAYA: Boustead Naval Shipyard (BNS), the company embroiled in the Littoral Combat Ships (LCS) scandal, was in bad financial shape, running up losses amounting to RM462mil between 2014 and 2018.
This led to payments to the original equipment manufacturer and suppliers of the LCS project to be delayed, according to a report that was declassified yesterday.The report highlighted the poor financial management and cash flow issues faced by BNS and said the company had “limited financial ability” to carry out the project.
“Up to May 31, 2019, the overall position of BNS’ creditors amounted to RM801.11mil, and the LCS project creditors totalled RM733.55mil,” the report read.It also said salary issues and late payments to subcontractors led to a lack of manpower, skilled welders and quality control.Things are not likely to get better soon with BNS struggling to service loans of nearly RM1bil.
The report stated that BNS had applied for a deposit of RM1.8bil – or 20% of the contract value – to kickstart the LCS project. The report described as “out of the ordinary” the ministry’s approval of RM1.365bil to BNS and bank guarantees exemption.
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