Malaysia’s Boustead Naval Shipyard (BNS) and the China Shipbuilding & Offshore International Co (CSOC) are discussing the terms of a new partnership following the Malaysian government’s decision earlier this year to “minimise costs” in the programme to procure four Littoral Mission Ships (LMSs) for the Royal Malaysian Navy (RMN), an industry official has told Jane’s .
The move to reduce costs resulted in a government decision to build all four 68 m vessels in China instead of an earlier plan to construct two of the ships at BNS facilities in Malaysia. The decision was announced in a stock exchange filing by BNS parent company, Boustead Heavy Industries Corporation (BHIC), earlier in March. The new arrangement also reduces the value of the contract from MYR1.17 billion (USD287 million) to MYR1.05 billion.
Malaysia’s Boustead aims to secure a new partnership with the China Shipbuilding & Offshore International Company to support Chinese-built Littoral Mission Ships (pictured) (IHS Markit/Ridzwan Rahmat)
An official from BHIC told Jane’s on 26 March at the LIMA 2019 exhibition in Langkawi that BNS and CSOC – the international trading arm of the China Shipbuilding Industry Corporation (CSIC) – are negotiating a new industrial deal, through which BNS would be positioned to provide comprehensive maintenance, repair, and overhaul (MRO) support for the four ships when they become operational. He said the new co-operation agreement would be finalised in a few months but remains subject to government approval.
The BHIC official said, “The government is reviewing all major defence programmes and we were instructed to minimise costs, and the cost of building the vessels in Malaysia involved technology transfers and training. A new agreement is under discussion. We would expect to receive work under this agreement to provide work including MRO.”
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