LCS Project 7.55 Pct Behind Schedule — National Audit Dept

KUALA LUMPUR, Oct 5 – The Littoral Combat Ship (LCS) construction project was 7.55 per cent behind schedule as of June 25, 2026, with overall delays ranging from 30 to 108 days, according to the National Audit Department (JAN).

In a statement issued on the Auditor General’s Report (LKAN) 2/2026—which was tabled in the Dewan Rakyat on Monday, October 5, 2026—the department warned that the setback poses a direct risk to the Physical Handover (PHO) of LCS 1, which was originally scheduled for August 26, 2026, and later revised to December 26, 2026.

“Should the PHO take place on either date, LCS 1 will be handed over without full operational capability, as training and weapon systems have yet to be completed,” the statement read.

Operational Risks and Extended Timeline

JAN highlighted that full operational readiness for the fleet is heavily tied to the Supplementary Contract, which will only reach completion in December 2035—extending significantly past the Main Contract’s deadline of April 25, 2030.

Key audit findings and observations include:

• Cascading Delays: The delay in the Physical Handover of LCS 1 is expected to disrupt and push back the PHO timelines for subsequent vessels (LCS 2 through LCS 5).
• PAC Mandate: The interim audit on physical and financial progress, contract management, and payments was conducted following a Public Accounts Committee (PAC) recommendation on October 9, 2023, requiring JAN to audit the project prior to LCS 1’s handover to the Royal Malaysian Navy (TLDM).

Key Audit Recommendations

To address the project’s critical vulnerabilities, the National Audit Department recommended that the Ministry of Defence implement immediate corrective measures:

• Recovery Action Plan: Formulate a realistic recovery plan aligning all critical tasks under both the Main and Supplementary Contracts directly with the LCS PHO timeline.
• Conditional Acceptance Terms: Ensure any conditional vessel acceptance clearly defines contractor obligations, strict completion schedules, and responsibilities until full operational readiness is achieved.
• Enhanced Oversight: Strengthen project monitoring frameworks by assigning designated officers and establishing firm deadlines for resolving critical issues through project completion.

–NMT