Cost overrun from axed Norway missile deal yet to be determined, says Khaled

PETALING JAYA: The cost overrun to be borne by the government following Norway’s decision to cancel export licences for a naval strike missile (NSM) system has yet to be finalised, the Dewan Rakyat was told.

“It (the cost overrun) depends on the agreed course of action, as well as the options for replacing the weapons systems that are currently being evaluated,” defence minister Khaled Nordin said in a written reply.

He was responding to Hisham Abdul Aziz (PN-Tanah Merah) who wanted to know how much cost overrun the government had to bear from the contract’s cancellation.

According to missile manufacturer Kongsberg Defence & Aerospace, the NSM procurement contract was signed in April 2018 to equip six new littoral combat ships (LCS).

The Norwegian government recently revoked an export permit for the NSM ordered by Malaysia under the 2018 contract, saying that exports of its defence technology would be limited to its “allies and closest partners”.

Norway’s foreign affairs ministry confirmed the cancellation, saying it decided to revoke the export licence for the NSM system and its associated launcher systems due to the changing security landscape in Europe and around the world.

Malaysia had already paid 95% of the contract value.

The federal government is now seeking more than RM1 billion in damages from Kongsberg Defence & Aerospace.