Boost mitigation efforts, PAC tells govt over axed missile deal

PETALING JAYA: The Public Accounts Committee (PAC) today urged the government to boost mitigation and diplomatic efforts to ensure a fair resolution to Norway’s decision to cancel the export licence for a naval strike missile (NSM) system for the Malaysian navy.

In a statement, PAC chairman Mas Ermieyati Samsudin said the committee was seriously concerned over the matter, given that the government had already paid up to 95% of the total contract value.

“We hope that the government will remain fully committed to monitoring the littoral combat ships (LCS) delivery timeline to ensure that the vessels are completed with fully integrated defence systems and optimal combat capabilities.

“The government should also make full use of all available avenues for amicable negotiations or legal proceedings to seek appropriate compensation in accordance with the terms and conditions of the contract.”

Last month, Prime Minister Anwar Ibrahim slammed Norway’s decision to revoke the export licence for the NSM system and its associated launcher systems, describing it as unacceptable.

Anwar said Malaysia had faithfully honoured every obligation under the contract since 2018, while Norway “has not felt compelled to extend us the same courtesy and demonstration of good faith”.

He also said Norway’s decision to revoke the licence would have grave consequences for Malaysia’s defence operational readiness and the LCS modernisation programme, with broader ramifications for regional balance.

Defence minister Khaled Nordin said in May that Malaysia was seeking more than RM1 billion in damages from Norwegian missile manufacturer Kongsberg Defence & Aerospace over the cancellation.

The missiles, meant to equip the navy’s LCS as well as KD Lekiu and KD Jebat, were supposed to be delivered in March.

Kongsberg Defence & Aerospace said the procurement contract worth 124 million euros (RM571.9 million) was signed in April 2018 to equip six new LCS.