KOTA TINGGI, June 2 – Malaysia has proposed that Norway prioritise compensation payments following its unilateral revocation of the export licence for the Naval Strike Missile (NSM), a move that disrupted the country’s Littoral Combat Ship (LCS) project.
Defence Minister Datuk Seri Mohamed Khaled Nordin said Norway’s decision not to approve the export licence was the primary cause of the issue.
“The root cause of everything is Norway’s decision not to approve the export licence to Malaysia. Therefore, Norway cannot wash its hands of this matter because it was their decision that caused this problem,” he said.
The Kota Tinggi Member of Parliament said this at a press conference after a meeting programme with taxi drivers at the Kota Tinggi Bus and Taxi Terminal here today.
Mohamed Khaled said he had recently conveyed Malaysia’s firm position on the matter to his Norwegian counterpart, stressing that efforts to expedite the compensation fund would demonstrate Norway’s sincerity in preserving bilateral relations between the two countries.
On the payment method, Mohamed Khaled proposed that the Norwegian government advance the compensation payment to Malaysia before pursuing reimbursement claims from the defence company involved.
“The company that failed to fulfil this contract is a Norwegian company. Therefore, as a government, Norway can negotiate with its own company rather than forcing Malaysia to wait indefinitely without certainty,” he said.
He said the funds were urgently needed to enable the Ministry of Defence to procure an alternative missile system for use by the Royal Malaysian Navy (RMN).
Mohamed Khaled also described the unilateral action as more than just a financial loss, saying it had undermined international confidence in legal assurances, global agreements and the validity of defence contracts that had already been signed and paid for.
Commenting on the financial implications, he estimated Malaysia’s direct losses at more than RM600 million, representing the cost of the missiles, while indirect costs have pushed the overall impact to more than RM1 billion.
“These additional costs cover the procurement of a replacement system, integration of a new weapons system on the ships and the need for new training. So who should bear these costs when the supply failure was not Malaysia’s fault?” he said.
Meanwhile, Mohamed Khaled said the ministry is actively evaluating alternative offers from several countries, including Italy, France, Turkiye, South Korea, the United States and Japan, to replace the missile supply originally sourced from Norway.
However, he stressed that any replacement system must already be in active production to avoid lengthy delivery delays.
Regarding Norway’s recent apology, Mohamed Khaled said Malaysia accepted the gesture but confirmed that legal action and compensation claims over the procurement failure would proceed.
According to the Kongsberg Defence & Aerospace website, the NSM procurement contract was signed between the RMN and the company in April 2018, valued at 124 million euros (RM571.9 million), to equip six new LCS vessels. – BERNAMA
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