The government has yet to determine the exact cost overrun it will have to bear following Norway’s decision to revoke the export licence for a naval strike missile (NSM) system, the Dewan Rakyat was told.
Defence Minister Datuk Seri Mohamed Khaled Nordin said the final amount will depend on the agreed course of action and the options being considered to replace the affected weapons systems.
He was responding in a written reply to Tanah Merah MP Hisham Abdul Aziz, who asked about the financial implications arising from the cancellation of the contract.
According to missile manufacturer Kongsberg Defence & Aerospace, the NSM procurement agreement was signed in April 2018 to equip six Littoral Combat Ships (LCS).
The Norwegian government recently withdrew the export permit, stating that its defence technology exports would now be limited to allies and close partners amid changing global security conditions.
Norway’s Foreign Affairs Ministry confirmed the decision, saying the revocation covered the NSM system and its associated launcher components.
Malaysia had reportedly already paid about 95 per cent of the contract value for the system.
The federal government is now seeking more than RM1 billion in damages from the Norwegian defence company.
