LCS project delayed 7.55pc, putting first ship handover at risk — Auditor General

KUALA LUMPUR: The Littoral Combat Ship (LCS) project was delayed by 7.55 per cent, putting the physical handover (PHO) of the first ship, at risk, according to the Auditor General's Report 2/2026.

Auditor General Datuk Seri Wan Suraya Wan Mohd Radzi said the delay ranged from 30 to 108 days, posing a risk to the earliest scheduled PHO of LCS 1 on Aug 26, or the revised target of Dec 26.

"Overall, as of June 25, the LCS project recorded a 7.55 per cent delay in progress, with the delay ranging from 30 to 108 days.

"The delay poses a risk to the earliest PHO of LCS 1, scheduled for Aug 26, or the new target of Dec 26.

"If the 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," she said in a statement.

Wan Suraya said the project's full readiness also depended on a supplementary contract which could only be completed in December 2035, five years after the expiry of the main contract on April 25, 2030.

"Full readiness of the LCS project depends on the Supplementary Contract, which can only be completed in December 2035, beyond the expiry of the Main Contract on April 25, 2030," she said.

She said the delay in the PHO of LCS 1 would also affect the handover schedules for LCS 2 to LCS 5.

Wan Suraya said the interim audit was conducted to assess the management of the LCS project in terms of physical and financial progress, contract management and payments based on the terms of the contract and prevailing regulations.

The audit also took into account the Public Account Committee's recommendation in its report dated Oct 9, 2023, for the National Audit Department to audit the LCS project before LCS 1 was handed over to the Royal Malaysian Navy and table the audit findings in Parliament.

The Auditor General's Report 2/2026 tabled in Parliament today comprises 15 documents covering government finances and activities.