The Malaysian Ministry of Defence (MoD) has outlined the scope of some of the offsets it will secure through its contract with China to procure four Keris-class Littoral Mission Ships (LMSs) for the Royal Malaysian Navy (RMN).
The MoD said in a statement in early August that local shipbuilder Boustead Naval Shipyard (BNS) will receive technologies from China to support localised maintenance, repair, and overhaul (MRO) services for the ships.
BNS was initially positioned to construct two of the 68 m LMS vessels, but the MoD announced earlier this year that all four ships would be constructed in China to cut costs.
In its press release the MoD clarified that despite its decision to build all vessels in China, BNS would still benefit through the programme. “This decision will not negatively affect ongoing agreements with regards to the transfer of technology and knowledge and will not cause Malaysia to be dependent on China,” said the MoD.
It added, “The Chinese side has agreed to carry out technology and knowledge transfer programmes … and these will be done via BNS and other identified vendors. This also applies in the area of maintenance, repair, and overhaul and logistics support.”
The MoD added that despite all four ships being built in China, the programme will consider the RMN’s future MRO requirements and will help Malaysia reduce dependency on foreign support. The MoD indicated that Malaysian workers will also have future opportunities to expand capabilities through technology transfer programmes and job placements in China.
At a cost of MYR1.17 billion (USD279 million), the four-ship contract was signed in 2017 between the Malaysian government and China Shipbuilding Industry Corporation (CSIC). Under a revised deal announced in March 2019 – with all vessels built by CSIC – the value of the contract was reduced to MYR1.05 billion.