Why is the Defence Ministry wary of supplier talks over RM1.06b claim?

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Defence Ministry Cautious of Supplier Talks to Avoid Claim Delays

The Defence Ministry is proceeding with caution regarding discussions requested by the Naval Strike Missile (NSM) supplier, primarily to prevent these talks from being exploited as a tactic to delay the RM1.06 billion claims process. Minister Datuk Seri Mohamed Khaled Nordin has emphasized that while the ministry remains open to dialogue, they are vigilant against any attempts to obstruct or postpone the resolution of the claims.
Concerns Over Delay Tactics

Minister Mohamed Khaled Nordin explicitly stated that the ministry is aware of and vigilant against any potential tactics that could be used to delay the RM1.06 billion claims process. The request for discussions from the supplier, Kongsberg Defence and Aerospace (KDA), has been noted, but the ministry's priority is to ensure that these conversations do not become a means to prolong the settlement of the financial claims.
Background of the RM1.06 Billion Claim

The substantial claim of RM1.06 billion arises from the cancellation of the NSM anti-ship missile deal with KDA. This claim encompasses both direct financial payments already made by Malaysia, totalling EUR129.86 million (RM604 million), and indirect claims amounting to EUR96.26 million (RM448.12 million) which cover the cost implications and broader effects resulting from the failed supply. The Norwegian government had previously revoked the export license for the NSM system on security grounds, leading to the contract's termination.
Ongoing Efforts for Replacement Systems

In parallel with the claims process, the Defence Ministry is actively pursuing alternative missile systems to equip the Royal Malaysian Navy's Littoral Combat Ships (LCS). An evaluation team comprising navy officers has been established to identify the most suitable replacement from four potential countries. This selection process is designed to ensure that the chosen system meets the navy's operational requirements, going beyond mere technical specifications.

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Why is the Defence Ministry wary of supplier talks over RM1.06b claim?

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