Kuala Lampur:The Littoral Combat Ship (LCS) project is currently 7.55% behind schedule as of June 25, 2026. Delays have been reported to range from 30 to 108 days, as highlighted by the National Audit Department (JAN) in a statement on the Auditor General's Report (LKAN) 2/2026.

According to BERNAMA News Agency, This delay poses a risk to the Physical Handover (PHO) of LCS 1, which was originally scheduled for August 26, 2026, and subsequently revised to December 26, 2026. The handover is expected to occur without full operational capability, as essential training and weapon systems remain incomplete. The report stresses that full operational readiness hinges on the completion of a Supplementary Contract by December 2035, surpassing the Main Contract's deadline of April 25, 2030. The delay in LCS 1's handover is also expected to impact the timelines for LCS 2 through LCS 5.

The Auditor General's Report (LKAN) 2/2026, presented in the Dewan Rakyat, includes the Federal Government's Financial Statements for 2025, activities of federal ministries and departments, as well as state governments, agencies, and the management of state-owned companies. An interim audit was conducted by JAN to evaluate the LCS Project's management, focusing on physical and financial progress, contract management, and payments.

The audit considered a recommendation from the Public Accounts Committee (PAC) in its October 9, 2023, report, urging JAN to audit the LCS Project before the handover of LCS 1 to the Royal Malaysian Navy (TLDM) and present the findings in Parliament.

To facilitate project completion with the necessary operational readiness, JAN advised the Ministry of Defence to create a realistic recovery action plan. This plan should align all critical activities under the Main and Supplementary Contracts with the LCS PHO schedule. Additionally, the Ministry was recommended to ensure that any conditional acceptance of vessels defines the contractor's obligations, completion timelines, and responsibilities until the vessels achieve the specified operational capabilities. Strengthening project monitoring by assigning responsible officers and establishing deadlines for addressing critical issues until project completion was also recommended.