No advance payment made for axed Norway missile deal, says Khaled

PETALING JAYA: Defence minister Khaled Nordin has denied claims that Malaysia made an advance payment of RM571.9 million for a cancelled Norwegian naval strike missile (NSM) system, stating that the payment was only made after contractual milestones had been fulfilled.

Khaled said the payment was made in accordance with the contract’s terms after all the missile systems had been completed, passed tests conducted by the navy, and were ready for delivery to Malaysia.

“It was not an advance payment, but was made according to the terms of the contract based on verified work progress,” he said in a written parliamentary reply.

He was responding to Hassan Karim (PH-Pasir Gudang), who asked why the government released the full RM571.9 million payment and whether the agreement contained sufficient safeguards for Malaysia’s interests.

In May, Khaled had said the government paid nearly 95% of the contract value, amounting to more than RM500 million.

According to the Kongsberg Defence & Aerospace website, the NSM procurement contract was signed between the navy and the company in April 2018, valued at €124 million (RM571.9 million), to equip six littoral combat ships.

Khaled also rejected allegations that the contract lacked adequate provisions to protect the government.

He said the agreement included clauses allowing the government to take action in the event of non-performance or breach of contractual obligations.

He said Norway’s decision to revoke the export licence for the missile system was beyond the control of both the Malaysian government and the supplier.

Malaysia is seeking more than RM1 billion in damages from Kongsberg, which include indirect costs such as the removal of missile mounting systems already installed on the navy’s vessels, as well as the integration of replacement systems supplied by other vendors.