The Littoral Combat Ship (LCS) project was 7.55 per cent behind schedule as at June 25, 2026, with delays ranging from 30 to 108 days, according to the National Audit Department.
In a statement on the Auditor General’s Report (LKAN) 2/2026, the department said the delays posed a risk to the earliest Physical Hand Over (PHO) of LCS 1, which was initially scheduled for Aug 26, 2026 and later revised to Dec 26, 2026.
“If PHO is carried out on either of these dates, LCS 1 will be handed over without achieving full capability as training and weapons systems have yet to be completed,” it said.
The department said full readiness of the LCS project depends on the completion of the Complementary Contract, which is only expected to be completed in December 2035, beyond the Main Contract’s end date of April 25, 2030.
It said delays to the PHO of LCS 1 would also affect the delivery timelines for LCS 2 to LCS 5.
The interim audit assessed the project’s physical and financial progress, contract management and payments against contractual terms and applicable regulations.
The audit also took into account recommendations by the Public Accounts Committee in its Oct 9, 2023 parliamentary report for the National Audit Department to audit the LCS project before LCS 1 is handed over to the Royal Malaysian Navy and table its findings in Parliament.
To ensure the project is completed and handed over at the required readiness level, the department recommended that the Defence Ministry establish a realistic recovery action plan to align all critical activities under the Main Contract and Complementary Contract with the LCS delivery schedule.
It also recommended that any conditional acceptance of the ships clearly set out the obligations, completion periods and responsibilities of the contractor until the vessels achieve the required capabilities.
The ministry was further urged to strengthen project monitoring by assigning officers responsible for each critical issue and setting deadlines for resolution until the project is completed.
