Defence Ministry wary of delay tactics as naval supplier seeks talks over cancelled RM1.06b deal, says minister

KOTA TINGGI, July 5 — The Defence Ministry has stated that the Naval Strike Missile (NSM) supplier has requested discussions over the RM1.06 billion claim stemming from the cancelled procurement for the Royal Malaysian Navy (RMN).

However, Minister Datuk Seri Mohamed Khaled Nordin said the ministry is cautious about any discussion being used as an excuse or tactic to delay the claims process.

“The company has requested to meet with us. But while we are open to discussion, we do not want it to be used as a delaying tactic in the claims process. 

“We are always aware and vigilant against any such tactics to avoid being trapped,”  he told reporters after attending the Ilmiah Keagamaan Masyarakat (PIKAT) programme at Felda Air Tawar 2 today.

The Norwegian government was previously reported to have revoked the export licence for the NSM anti-ship missiles and their launch systems on security grounds.

According to Kongsberg Defence and Aerospace’s (KDA) website, the NSM missile deal was signed with RMN in April 2018 at EUR124 million (RM571.9 million) to equip six new Littoral Combat Ships (LCS).

Following the cancellation, Malaysia is claiming RM1.06 billion from KDA, comprising EUR129.86 million (RM604 million) in direct claims for payments already made, plus EUR96.26 million (RM448.12 million) in indirect claims covering cost implications and knock-on effects from the failed supply.

In a related development, Mohamed Khaled said an evaluation team of navy officers has been formed to identify the best missile system from four countries to replace KDA’s Norwegian-made NSM.

“Yes, it’s underway, and we want it evaluated ASAP,” he said briefly.

On June 28, Mohamed Khaled was reported as saying the ministry had identified four potential countries to supply the anti-ship missile system for the LCS following Norway’s cancellation. Turkey and South Korea are among the contenders, along with two European nations. 

He said the selection process goes beyond basic specifications, factoring in key criteria to ensure the chosen system meets the navy’s operational needs. — Bernama