Was the cabinet misled into entering a RM6.75 billion navy deal to purchase six high-tech offshore patrol vessels? Opposition party DAP would dearly love to know.

Despite being riddled with problems like mismanagement and delays in the delivery of the vessels, the government has approved an extra RM1.4 billion to complete their construction.

According to the 2006 Auditor-General's Report, the government has also not explained why it waived RM214 million in penalties for late delivery that it is entitled to claim from the contractor.

"DAP proposes a royal commission of inquiry to determine whether the cabinet was misled into making such foolish decisions," DAP secretary-general Lim Guan Eng told reporters today after submitting a memorandum addressed to Defence Minister Najib Abdul Razak.

It was received by Tuan Ida Syuriati, an aide to the minister's political secretary, at the ministry's office in Kuala Lumpur. Also present were the party's parliamentarians Lim Hock Seng (Bagan) and Chong Chieng Jen (Bandar Kuching), as well as Lim's aides.

Lim stressed the need for the government to give due concern on questions raised in the report since the navy-boat deal is the single largest case of misuse of public funds in the latest audit.

"Even though there are numerous other cases involving misuse of public funds in the 2006 report, the total sum involved in those cases were not as much as RM6.75 billion," said Lim.

Asked whether there is indeed a need for the high-tech vessels, he said these may be needed for security reason but that the vessels could have been purchased.

"We could have bought them from established naval shipyards in Europe. It would have been cheaper instead of getting a shipyard with no track record in building patrol vessels to construct them here," he said.

'Terminate contract'

In his memorandum, Lim urged Najib - who is also the deputy premier - to give a full explanation on the matter or admit that the cabinet was misled into making the wrong decisions.

The DAP leader said the construction of the remaining four vessels should be terminated.

"Clearly, the cabinet is not only wrong to continue to throw good money after bad but also foolish in doing so," he said.

"Despite the allegations by former prime minister Dr Mahathir Mohamad about 'half-past six' ministers in cabinet, (Najib) should prove Mahathir wrong."

The Auditor-General (AG) revealed in his report, released last week, a number of serious issues with the ministry's handling of the project.

The shipyard was contracted to build the vessels at an initial price capped at RM5.35 billion, with the first vessel was to be delivered in March 2004.

To date, two problem-ridden vessels have been delivered to the Royal Malaysian Navy - two years late at that. The rest are under construction, exceeding the deadline for delivery which was set at April this year.

Close to 300 complaints have been lodged over the operation of the vessels in hand, and the AG has warned of other weaknesses which have exposed the government to risk of additional losses.

For example, the ministry had paid RM4.26 billion in advance to the contractor, although the value of the physical works completed up to then on all six vessels was only RM2.87 billion.

The lucrative contract was awarded to PSC-Naval Dockyard Sdn Bhd - a subsidiary of PSC Industries Bhd owned by Amin Shah Omar Shah - in 1998. The company was renamed Boustead Naval Shipyard Sdn Bhd in August last year.

Prime Minister Abdullah Ahmad Badawi has reportedly said that ministries implicated in the AG's report for mismanaging funds and irregularities must explain to the cabinet.

The parliamentary Public Accounts Committee, which has been investigating the navy deal since 2005, said it will meet with the AG soon to discuss matters raised in the latest report.