Audit Dept: LCS project 7.55pc behind schedule, risks handing over ship without full capability

Five Littoral Combat Ships (LCS) under construction for the Royal Malaysian Navy, with the project 7.55 per cent behind schedule as of June 25, 2026, according to the Auditor General’s Report released on October 5, 2026. — Bernama pic

First Published: Monday, 05 Oct 2026 11:57 AM MYT

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

In a statement on the Auditor General’s Report (LKAN) 2/2026, the department said the delay posed a risk to the Physical Handover (PHO) of LCS 1, initially scheduled for Aug 26, 2026, and the revised target of Dec 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.

“Full operational readiness of the LCS project depends on the Supplementary Contract, which can only be completed in December 2035, well beyond the Main Contract’s deadline of April 25, 2030. The delay in the PHO of LCS 1 will also affect the PHO timelines for LCS 2 through LCS 5,” the statement read.

The Auditor General’s Report (LKAN) 2/2026, covering the Federal Government’s Financial Statements for 2025, the activities of federal ministries and departments, as well as state governments, agencies, ministries and departments and the management of state-owned companies, was tabled in the Dewan Rakyat today.

JAN said an interim audit was conducted to assess the management of the LCS Project, including its physical and financial progress, contract management and payments, based on the terms of the contract and regulations in force.

The audit took into account a recommendation by the Public Accounts Committee in its parliamentary report dated Oct 9, 2023, which urged JAN to audit the LCS Project before the handover of LCS 1 to the Royal Malaysian Navy and table the findings in Parliament.

To ensure the LCS Project is completed and handed over with the required level of operational readiness, JAN recommended that the Ministry of Defence establish a realistic recovery action plan, with all critical activities under the Main Contract and Supplementary Contracts aligned with the LCS PHO schedule.

It also recommended that the Ministry ensure any conditional acceptance of the vessels clearly sets out the contractor’s obligations, completion timelines and responsibilities until the vessels achieve the specified operational capabilities.

It was also recommended that the Ministry of Defence strengthen project monitoring by assigning responsible officers and setting deadlines for resolving each critical issue until the project is completed. — Bernama

* Editor’s note: JAN is the Malay abbreviation for Jabatan Audit Negara (National Audit Department), while LKAN stands for Laporan Ketua Audit Negara (Auditor General’s Report).