The Auditor-General’s Report found that the Defence Ministry failed to claim liquidated damages totalling RM116.54 million for late delivery of a Littoral Combatant Ship class vessel to the navy.
Delivery was due in April 2019 but was late by 245 days.
“Liquidated damages amounting to RM116.54 million was not imposed on the company for the delay in delivering the ship by 245 days from the original delivery date,” Auditor-General Nik Azman Nik Abdul Majid said at a press conference today.
He added the company was paid an advance of 21.1% of the price.
Deputy auditor-general of finance Che Isa Che Kob said the contract with the supplier stipulated that the ministry could only claim for reimbursement a year after delivery.
“There was an element in that contract that is rarely seen in other contracts…which was a capping element,” he said.
The ministry has four months after the expiry of the year to make the claim, he said.
The auditors also found that the Defence Ministry had neglected to impose late penalty charges on the supplier of 20 lightweigher multiple launchers, which were expected in September 2018 but arrived late by up to 171 days.
Another finding was Putrajaya’s purchase of nine armoured personnel carriers (APC) which did not meet United Nations specifications leading to a shortfall of RM2.22 million.
Nik Azman said there was a lack of safety features in the APCs but there was nothing the government could do about it as they were already deployed in Lebanon.
“The APCs have been sent to Lebanon. We just hope and pray that our crew/army will be safe. That is the best we can hope for,” he said.
The auditors recommended that the ministry goes through its existing contracts, reduces advance payments, and pursues legal action against companies that fail to deliver. – TMI