LCS vessels afloat but not yet combat-ready

The littoral combat ship (LCS) is sailing onto the public horizon again.

As of 25 June, overall physical progress in Malaysia’s littoral combat ships construction programme stood at 79.0%, compared with a planned target of 86.5% – a shortfall of 7.5 percentage points.

This was revealed in the Auditor General’s Report Series 2/2026 tabled in Parliament on 5 October.

According to press reports, the lead vessel, LCS 1, risks being handed to the navy without full operational capability.

The physical handover was first targeted for 26 August. It was then revised to 26 December.

However, on 7 October, Defence Minister Mohamed Khaled Nordin said Lumut Naval Shipyard (Lunas) had set April 2027 as the new delivery date for LCS 1 under phase 1. The shipyard had told the ministry it could not meet the December 2026 commitment.

The LCS project originally covered six vessels. Five are now under construction.

Full operational readiness depends on a supplementary contract due for completion in December 2035. That is far beyond the main contract’s revised expiry date of 25 April 2030.

The project has undergone significant contractual changes since its inception, to address cost overruns and structural delays.

Missile row with Norway

A critical reason for the delay revolves around the surface-to-surface missile system, specifically the Naval Strike Missile (NSM) launcher system.

Norway has cancelled the export permit for the NSM system. It was ordered under a 2018 contract with Norwegian defence manufacturer Kongsberg Defence & Aerospace AS.

The NSM is jointly produced and marketed globally by Kongsberg and the American defence company Raytheon. Oslo said the move followed a tightening of controls on certain technologies.

Even direct diplomatic efforts have reportedly made no progress. They included personal interventions by Prime Minister Anwar Ibrahim, foreign affairs officials and Mohamed Khaled. Malaysia has so far not secured the co-operation it sought from Oslo.

Malaysia is reportedly seeking more than RM1bn in compensation from Kongsberg for direct and indirect losses. It has reportedly paid 95% of the RM634m procurement price. The government is pursuing recovery of these funds through legal action.

To stop the vessels from sitting idle, the Ministry of Defence (Mindef) is preparing to seek a new allocation of between RM0.7bn and more than RM1bn. The money would buy replacement SSM from candidate countries.

However, replacement missile procurement is estimated to take 36 months.

Added to the remaining contract and integration timeline, full missile capability could stretch to December 2035. That is consistent with the audit’s finding that the supplementary contract can only be completed then.

There is another operational issue. Any replacement ordnance must integrate smoothly with the LCS fleet’s combat management system. The system depends on supplies from French naval defence contractor Naval Group.

Why the delays?

The audit findings and technical reports attribute the delays to four main factors.

First, the cancellation of the NSM export permit has halted supply and forced re-procurement of the main offensive weapon.

Second, a technical audit by France’s Naval Group reportedly identified nearly 4,000 items needing rework. Testing and commissioning of 170 major systems are still under way.

Third, the European defence supply chain was severely disrupted after Covid. Several European original equipment manufacturers went bankrupt, forcing the contractor to find and recertify new vendors.

Fourth, administrative changes added delays. Eight supplementary contracts had to be drafted, negotiated and legalised. The project’s finances were also restructured from milestone-based payments to progress-based tracking.

The audit followed a recommendation by the Public Accounts Committee in its 9 October 2023 parliamentary report. Auditor General Wan Suraya Wan Mohd Radzi then urged the Ministry of Defence (MoD) to draw up a realistic recovery plan.

The ministry is considering accepting LCS 1 on a conditional basis at the physical handover, to avoid keeping the asset idle. However, it stressed that conditional acceptance will not absolve the contractor of its obligations. These cover missile installation, system integration and remaining trials.

On 27 April 2026, the contractor formally applied to amend the handover date. The ministry’s technical committee is reviewing the application to safeguard government interests. The contractor is to keep working towards the revised deadlines. Lunas has since proposed 19 April 2027 as the new date.

Mohamed Khaled said the MoD will secure replacement weapons separately from the legal recovery process against Kongsberg and Norway. The aim is to protect national maritime security and readiness.

A submarine parallel

The LCS saga runs somewhat parallel to the country’s submarine story.

The government signed an RM1.0bn five-year maintenance and repair contract for the submarines at the Lima 2025 defence exhibition. The contract, with BHIC Submarine Engineering Services (BSES), covers the Navy’s two Scorpène-class submarines.

The two submarines are also due for a staggered major refit and overhaul at the Teluk Sepanggar dry dock in Sabah. Each is expected to take about 30 months.

As of 2026, the Malaysian Anti-Corruption Commission (MACC) is using mutual legal assistance through the Attorney General’s Chambers to secure cross-border evidence and banking records.

Former navy chief Ahmad Ramli Mohd Nor was charged in 2022 with criminal breach of trust involving Boustead Naval Shipyard in connection with the LCS programme. He was later granted a discharge not amounting to an acquittal.

With the submarines not diving but in deep water, these combat ships are stuck too, dwarfed by their own troubles and left berthed.

Support our work by making a donation. Tap to download the QR code below and scan this QR code from Gallery by using TnG e-wallet or most banking apps: