The sinking of the Royal Malaysian Navy's KD Pendekar on Sunday has got the nation talking again, with grave concern, about its aged ships, postponed procurement, delayed delivery and wasted spare parts.
This troubling state of affairs in the RMN came into public knowledge on July 4 when the Auditor General's Report 2/2024 was tabled at the Dewan Rakyat.
The AG's report was scathing. Since then, there have been analyses galore of sorts, much of the bromides raising concerns about how the country is going to secure its sea lanes.
The concerns aren't misplaced. Malaysia is largely a maritime nation, with Peninsular Malaysia being separated from Sabah and Sarawak, by a huge mass of the South China Sea. With half of RMN's 49 ships operating at less than their optimal level — to put it generously, that is — and with 14 new ones yet to be delivered, according to the AG's report, it's going to be a challenge to maintain control of the sea between the peninsula and the Borneo states.
The challenge is made worse by China claiming much of the South China Sea to be its, which is at odds with Malaysia's rights as provided for by the United Nations Convention of the Law of the Sea, to which both China and Malaysia are signatories.
The RMN may claim that it doesn't have the funds that it needs to be a tier-one navy in the region. It has not done so — not publicly at least — though the claim will be right. But before making the claim, the RMN must repair its governance.
Take the case of wasted spare parts. We are not talking about thousands of ringgit but hundreds of millions. To quote the AG's report, RM384.49 million, almost the price of a littoral combat ship. Then there is the question of the delayed delivery of the 14 ships ordered a decade ago.
Time is money, and, in the case of the RMN, security the country has foregone, harsh though this may sound. Taxpayers' money must not be wasted like this. Take care of governance and funding will take care of itself.
We understand the federal government is under great strain, with RM1.58 trillion in debt and liabilities. This is made worse by states demanding more and more funds from Putrajaya.
Be that as it may, the federal government must channel enough funds to make the RMN a robust naval force to be reckoned with. Let's not forget that Malaysia's maritime security, sovereign rights and sovereignty are at stake here.
How can Putrajaya expand its revenue base? Not by imposing new taxes, but by widening the tax base with the view to the long term, as tax experts have suggested. Whatever it decides, it mustn't look to Petronas for special dividends, as it did in 2019, to help pay outstanding goods and services tax refunds, or as in 2022, to help pay Covid-19 expenditure.
The reason is based on a simple business truth: growth isn't possible without reinvestment of profits. And in the case of Petronas, its management guideline is 30 to 35 per cent of its profit. The RMN, too, must grow, but first it must work hard on its governance.