PETALING JAYA: The managing director of the company undertaking the RM9bil littoral combat ships (LCS) project had so much power that he could sign all agreements, including letters of award (LOAs) to the main contractors involved in building the six ships.

In fact, 12 LOAs were given by former Boustead Heavy Industries Bhd (BHIB) managing director Tan Sri Ahmad Ramli Nor to two main contractors – Contraves Advanced Devices Sdn Bhd (CAD) and Contraves Electrodyamics Sdn Bhd (CED) totalling RM3.3bil – without the need to call for full board meetings.

The involvement of the two contractors inflated the cost to RM9bil.

“Tan Sri was given sweeping authority to execute and sign all agreements, LOAs with CAD. He was extremely confident that ‘whatever I’m going to do, it is ultimately going to be condoned by my boss’,” said forensic auditor Alliance IFA Sdn Bhd’s Prabhat Kumar.

He revealed that the appointment of CAD as lead contractor to procure components for the LCS was made through a directors’ circular resolution (DCR).

A DCR is normally issued as approval for routine matters and where the board feels that calling all the members is a waste of time. The directors merely need to sign the document.

Prabhat expressed his surprise at how such a major decision was made through a DCR as it was more appropriate to have a full board of directors meeting.

“The reason is that when the board meeting is being conducted, (at) that time every board member has the opportunity to raise a number of questions to clarify doubts and issues,” he added.

He told the Public Accounts Committee (PAC) that in his investigations of over 60 companies that “whenever DCRs, in a very critical situation, are used, it is always used to avoid discussions”. CAD and CED are two companies which are jointly owned by BHIB and German firm Rheinmetall Group.

Ahmad Ramli, an ex-navy chief, was managing director of BHIB and former chairman of Boustead Naval Shipyard Sdn Bhd (BNS), a unit of Boustead Heavy Industries Corporation (BHIC).

His name has been repeatedly mentioned in the 247-page PAC report on the RM9bil scandal.

The LCS was supposed to have been delivered in stages with the last one scheduled for 2023 but until today, not a single ship is ready although RM6bil has been paid to BNS.

“Primary evidence suggested that CAD was used as a vehicle – this is very important – to minimise transparency and to avoid the scrutiny and detection by the procurement team, the steering committee, and the internal audit of BHIC.

“The scrutiny by the three was avoided because BHIC is a public-listed company,” said Prabhat.

He said: “CAD will be the vehicle… (that) by entering into such a contract, that does not allow them to enter and to look into the details and the nitty-gritty of the business, which has been taken by them.”

The involvement of CAD in the LCS project, said Prabhat, had “resulted in a much higher cost than expected and provided an umbrella to hide the actual cost, which was paid to secure various components for this programme”.

PETALING JAYA: Overlapping letters of award (LOAs), double claims for the same services, marked-up prices and the absence of supporting documents involving the two contractors in the setting up of a Built-in Test (BIT) centre for the littoral combat ships have cost taxpayers over RM898mil.

In its report, the Public Accounts Committee (PAC) named the two contractors as Contraves Advanced Devices Sdn Bhd (CAD) and Contraves Electrodynamics Sdn Bhd (CED).

The two companies belong to Boustead Heavy Industries Corporation (BHIC), which has a 51% stake, while German-owned Rheinmetall Group has the other 49%. CAD and CED are the contractors of the uncompleted six littoral combat ships (LCS) project.

Forensic auditor Alliance IFA Sdn Bhd’s Prabhat Kumar said the involvement of the two contractors had resulted in possible damages, such as overlapping LOAs for the BIT centre and double claims for the same services in the LOAs over the combat management system (CMS) amounting to RM898mil.

The BIT centre is set up to conduct trials and test the functionality of all equipment, supposedly for the six LCS, before these are accepted for installation on the ships.

Prabhat told the PAC of discrepancies, such as payments made without supporting documents.

“Payment milestones without deliverables and necessary documents. We did not see any supporting documents.

“Exceptional mark-up, except for the signature of the person. You know, approve, approve, approve.

“Exceptional mark-up as a middleman resulted in the loss of cash. That is why there was a person who was caught,” he was quoted as saying on page 139 of the 247-page report.

He did not name the person caught.

Prabhat also pointed out irregularities relating to the LOAs for the CMS, which were issued to CAD and CED.

The LOA for the CMS, equipment, and engineering and integration was awarded to CED at RM1.185bil on the basis of a quotation from DCNS, a French company.

DCNS is the former name of France’s Naval Group, which had also built the Scorpene submarines for Malaysia.

Prabhat said the quotation from DCNS was dated Dec 23, 2010, but this was issued even before the signing of the LOA with the government.

“This reflects the intent of those involved in this project. They had no intention to deliver the LCS project.

“They only want – intent to maximise their gain which was issued even before the signing of the LOA with the government,” he said, adding the LOA was issued, “sidelining the evaluation process by restricting the involvement of the technical and commercial team.”

He said within six months, a supplemental LOA was issued in favour of CED by former Boustead Heavy Industries Bhd managing director Tan Sri Ahmad Ramli Mohd Nor and ex-navy captain Anuar Murad, the head of the LCS programme at the Boustead Naval Shipyard (BNS), for the development of the BIT Centre at RM305mil.

“The scope of this LOA appeared to overlap with the original LOA. No specific approval was obtained from the board for the issuance of the LOA. The cost of investment was not budgeted in the LCS programme.

“The most important thing, payment was being made by them. Ownership lies with CAD and not BHIC,” he added.

Controversial project: One of the littoral combat ships under construction at the Boustead Naval Shipyard in Lumut.

PETALING JAYA: A huge amount of money meant for the uncompleted RM9bil six littoral combat ships (LCS) project was used to buy spare parts, including even TV sets, a special panel headed by former auditor-general Tan Sri Amrin Buang has revealed.

Fellow panel member Datuk Dr Mohd Tap Salleh also pointed out that the contract was drawn up in such a way that any activity or movement was considered progress and the government just had to pay.

“I think the point to note is that a lot of money was spent on buying spare parts when the ships were not ready,” said Ambrin.

“I think they are in the position to know exactly what they should be paying? When exactly should they make the purchase?

“So, if ada elemen-elemen yang tidak sihat, beli dulu you know, dalam keadaan apa sekali pun dan dapatkan duit itu cepat-cepat. (So, if there are unhealthy elements, buy first, you know, in whatever situation and get the money quickly).

“That is a different story-lah,’’ Ambrin said in his testimony to the Public Accounts Committee (PAC).

Ambrin had headed the Special Committee on Governance Investigation, Government Procurement and Finance’s report on the LCS project.

Dr Mohd Tap said the committee wanted to show to the PAC “that money was simply spent”.“Just to show you or to demonstrate to you, how crazy it was. They just buy because the money is there or the contract was there. So, we must pay. Activity means you buy anything or you move something, you have to pay,” he said.

Dr Mohd Tap described the LCS project as contractor-driven in the sense that the views of the end user – the Navy – was not taken seriously in terms of its needs.

“That is why the change from Sigma (class) to Gowind (class) was done within a few days and the negotiation of the pricing was also done within a few days, which is not possible.

“Unless there are hidden hands involved in this, I think the biggest issue that JKS (the committee) has faced all this while the end user – the military – was never very high on the agenda,” he said.

The Navy had wanted the Sigma design of the LCS by a Dutch firm and the combat management system (CMS) from France but following intense lobbying, Boustead Naval Shipyard (BNS), a unit of Boustead Heavy Industries Corporation (BHIC), opted for the Gowind design and SETIS-CMS from France.

Former Royal Malaysian Navy chief admiral Tan Sri Abdul Aziz Jaafar had told PAC that Gowind was not a proven design while Sigma was already operational in Indonesia, Morocco and in a few other countries.

(Dr Mohd Tap, who was the Malaysia Integrity Institute president, died on Nov 30, 2021, at the age of 72. According to PAC members, he was very vocal in the meetings to investigate the LCS issue.)

The Klang Convent school is also a historical institution which is not utilised commercially.

THE Infant Jesus Sisters (IJS), who are the owners of the country’s convent schools, have appealed for a review of the need for quit rent on some of their school buildings as they are not utilised commercially.

Sister Theresa Chua, who heads IJS Malaysia, says the quit rent for some of the school buildings are exorbitant.

“There are no commercial gains whatsoever, but we have to send appeal after appeal for the rate to be reduced.

“Why can’t this be a standard policy with the Education Ministry (MOE) sending a directive to the Land Office to get this done,’’ she asks.

Sister Theresa says many people assume that the Sisters own many properties in prime areas with high commercial value if sold.

“All the existing convent schools are used by the government. Selling may not even be an option as requesting the return of convent schools from the government takes at least five years or more of negotiations, besides justifying the reason for the school to be returned although the property belongs to the Sisters,’’ she says.

There are currently 56 convent schools comprising 34 primary and 22 secondary schools. In 2016, the IJS had already requested the return of its 170-year-old Convent Light Street (CLS) from the MOE with the intention for the school building to continue as an educational institution for all children of Malaysia.

The new school would be coed and placed under a private operator. The IJS made the decision to ask for CLS to be returned following declining enrolment in the past decade and escalating upkeep costs of the heritage building.

Sister Theresa says the Sisters have no properties to sell, except for one in Cheras, Kuala Lumpur, which is home to elderly Sisters.

“They will have no place to live if they sell their home in Cheras to pay for repairs to the schools. The Sisters have no income and we need to cope with ageing and retired Sisters,’’ she adds.

Sister Theresa appeals to the MOE to hear their concerns and to appoint special officers who understand the issues of convent schools, similar to those appointed to deal with Chinese and Tamil vernacular schools.

Convent Bukit Nanas is one of the oldest schools in Malaysia and has an illustrious list of alumni. — Filepic/The Star

CONVENT schools in Malaysia have a distinguished history dating back to the 19th century. They have iconic heritage buildings and have produced many prominent personalities over the decades.

The 170-year-old Convent Light Street (CLS) in Penang is the oldest girls’ school in South-East Asia and is located in a heritage zone.

Founded by French Catholic nuns in 1852, it is one of the most highly regarded missionary schools in the state. However, in the past decade, CLS has been hit by declining enrolment thanks to competition from international and Chinese schools.

Convent schools were once premier schools that used the English language as the medium of education, and were known for producing well-rounded students who excelled academically as well as in sports and music.

The three founding nuns were part of a group of five who managed to make it to Penang alive after the arduous journey from France via Singapore.

The sprawling CLS grounds were also home to the administrative offices of Captain Francis Light after he founded George Town in 1786. Stamford Raffles, the founder of Singapore, also worked at Govern-ment House in the CLS grounds. Penang, then known as the Prince of Wales Island, was his first overseas posting.

Convent Bukit Nanas (CBN) in Kuala Lumpur is also one of the oldest schools in Malaysia – established in 1899 – and is one of the first schools to be distinguished as a Cluster School of Excellence by the Education Ministry

Its alumni includes former minister Tan Sri Rafidah Aziz, Tengku Permaisuri Norashikin Abdul Rahman of Selangor, Bank Negara governor Tan Sri Nor Shamsiah Mohd Yunus, prominent lawyers Raja Eleena Almarhum Sultan Azlan Muhibbuddin Shah Al-Maghfur-lah and Ambiga Sreenevenan and the late singer Adibah Noor.

CLS has its list of famous alumni too, such as Datuk Ooi Chean See, Malaysia’s first woman orchestra conductor; Datuk Ng Poh Tip,The Star’s first woman group chief editor; and Datin Paduka Tunku Khadijah Tunku Abdul Rahman Putra, our first prime minister’s daughter, who studied as a full-time boarder in CLS.

Storied school: Convent Light Street was set up in 1852, the first IJS convent school in the country. Many of these highly regarded mission schools were built over 100 years ago. — LIM BENG TATT/The Star

THE 56 convent schools nationwide, which are run by the Infant Jesus Sisters (IJS), are in desperate need of financial support with at least 90% of the school buildings in dilapidated conditions in the absence of sufficient maintenance funds.

Many of these highly regarded convent schools were built over 100 years ago, with the first IJS school as well as orphanage set up in Light Street, George Town, in 1852.

At least two schools caught fire recently as they had to cope with roof leaks, wiring and plumbing issues, and even floods.

In a rare interview, Sister Mary Theresa Chua, the Provincial of the IJS – which is legally known as the Lady Superior of the Society of Saint Maur – says the estimated RM3mil annual grants from the Education Ministry (MOE) for all 56 schools would only be enough for basic maintenance, working out to around “RM50,000 to RM70,000 for each school’’.

“The buildings are very old and daily use, with minimal repairs, has taken a toll. In short, the yearly government allocation is barely enough to cover repairs and maintenance costs as we always must rely on donors and carry out fund-raising initiatives,’’ she says.

Sister Theresa: ‘The yearly government allocation is barely enough to cover repairs and maintenance costs and the schools have to rely on donors and raise funds themselves.’

For example, she points out how the authorities have yet to carry out repair work on the slope bordering the 123-year-old Convent Bukit Nanas after a landslip in February this year. The site borders the Kuala Lumpur Forest Eco Park, and Sister Theresa fears that the ongoing wet spell and the year-end rainy season would be a problem.

In 2020, a landslip also hit the school, which was established in 1899, after heavy rain caused a near collapse of a retaining wall.

Sister Theresa describes the plight of convent schools in Malaysia, which have produced hundreds of thousands of students including prominent figures, as desperate.

“We are in dire straits. We have no one to turn to and we pray that our problems, especially involving the safety of our students and teachers, will be heard,’’ she says.

Sister Theresa explains insurance premiums are not covered by the government and “when any unfortunate incident happens, the Sisters are left to handle and manage them”.

“Often, the Sisters have no means to make proper major repairs as evidenced in the latest Convent Bukit Nanas landslip.

“What makes no sense is that the landslip was due to the Forestry Department felling trees and cutting through the hillslope, thus loosening the soil and affecting water flow resulting in the clogging and retention of mud, which in turn blocks drains so that water is not able to flow,’’ she adds.

Sister Theresa says there is an urgent need for the MOE to meet Mission school authorities to talk about critical building issues, such as, for example, electrical appliances like airconditioners, computers and projectors that have led to capacity overload.

“We are in a dilemma. Most of these schools are over 100 years old and cannot cater for high voltage use.

“However, digital equipment is necessary in the current era and environment for teaching purposes,” she notes.

To support the Convent schools -– OCBC Bank Bhd, Account No : 701-157675-5

For more information, also call Sr Theresa Chua, Tel- 03-20318243 or 03-20780615