The Cabinet would dissolve a multibillion-dollar contract to build minesweeper ships with financially troubled Ching Fu Shipbuilding Co (慶富造船) if necessary, Premier William Lai (賴清德) told lawmakers yesterday.
Ching Fu, one of the nation’s largest private shipbuilders, won a NT$35.85 billion (US$1.19 billion at the current exchange rate) contract with the Ministry of National Defense in October 2014 to build six minesweepers as part of the nation’s indigenous shipbuilding and upgrade program, but it is suspected of using the money to invest in projects in China and of defrauding banks.
Prosecutors in August questioned company executives about NT$3 billion in loans that are suspected of having been obtained under false pretenses.
Photo courtesy of Ching Fu Shipbuilding Co
Ching Fu secured a NT$20.5 billion loan from a consortium of nine banks headed by First Commercial Bank (第一銀行) after having already received about NT$15 billion.
The money might end up being written off as a bad debt if the shipbuilder declares bankruptcy.
Speaking during a legislative sitting, Lai said that the government would “cut its wrists” — or terminate the contract — if necessary to prevent further losses, but first it would investigate if Ching Fu has the financial and technical abilities to complete the project.
The Cabinet is to form an investigative task force and take steps to ensure that the project’s first minesweeper, which is being built in Italy, would be transferred to the government and not mortgaged by Ching Fu’s debtors, Lai said.
It is to also take disciplinary action against any official found to have been negligent in awarding the contract to Ching Fu, he said.
The ship under construction in Italy is a 700-tonne vessel being built by Intermarine SpA, with the US firm Lockheed Martin providing support for the mine detection hardware and weapons systems.
New Power Party Executive Chairman Huang Kuo-chang (黃國昌) asked Lai how Ching Fu, which signed an investment deal with a Chinese local government before the minesweeper project was announced, could have been able to secure the contract.
“The shipbuilding technology we learn from the Italian manufacturers will end up in the hands of a contractor that has signed an investment agreement with a Chinese local government,” which could compromise national security, Huang said.
Ching Fu bought a sonar system designed for minesweepers from a Chinese company before it won the Ministry of National Defense tender, as if it knew it was going to win the bid, Huang said, asking if anything illegal was involved in the deal.
Ching Fu in 2001 delivered four patrol boats to the Coast Guard Administration, but 338 mechanical problems were found with the boats and the Control Yuan issued a correction to the Cabinet over the procurement process, the lawmaker said.
He asked Lai why the ministry awarded another multibillion New Taiwan dollar contract to an apparently unqualified contractor.
“How could we entrust a contractor that could not properly build a patrol boat with the important indigenous shipbuilding program?” Huang said.
The government allocated a budget of NT$3.47 billion between 2013 and last year for the shipbuilding project, but it overspent by NT$1.36 billion, officials said.
About half of the NT$3.87 billion budget allocated this year has already been paid to Ching Fu, Minister of National Defense Feng Shih-kuan (馮世寬) told lawmakers.
The ministry failed to obtain information about Ching Fu’s purchase of the sonar system before the contract was awarded, Feng said.
He also said he did not know how much of the minesweeper under construction in Italy had been completed.
The US government has signed defense cooperation agreements with Japan and the Philippines to boost the deterrence capabilities of countries in the first island chain, a report by the National Security Bureau (NSB) showed. The main countries on the first island chain include the two nations and Taiwan. The bureau is to present the report at a meeting of the legislature’s Foreign Affairs and National Defense Committee tomorrow. The US military has deployed Typhon missile systems to Japan’s Yamaguchi Prefecture and Zambales province in the Philippines during their joint military exercises. It has also installed NMESIS anti-ship systems in Japan’s Okinawa
‘WIN-WIN’: The Philippines, and central and eastern European countries are important potential drone cooperation partners, Minister of Foreign Affairs Lin Chia-lung said Minister of Foreign Affairs Lin Chia-lung (林佳龍) in an interview published yesterday confirmed that there are joint ventures between Taiwan and Poland in the drone industry. Lin made the remark in an exclusive interview with the Chinese-language Liberty Times (the Taipei Times’ sister paper). The government-backed Taiwan Excellence Drone International Business Opportunities Alliance and the Polish Chamber of Unmanned Systems on Wednesday last week signed a memorandum of understanding in Poland to develop a “non-China” supply chain for drones and work together on key technologies. Asked if Taiwan prioritized Poland among central and eastern European countries in drone collaboration, Lin
The Chien Feng IV (勁蜂, Mighty Hornet) loitering munition is on track to enter flight tests next month in connection with potential adoption by Taiwanese and US armed forces, a government source said yesterday. The kamikaze drone, which boasts a range of 1,000km, debuted at the Taipei Aerospace and Defense Technology Exhibition in September, the official said on condition of anonymity. The Chungshan Institute of Science and Technology and US-based Kratos Defense jointly developed the platform by leveraging the engine and airframe of the latter’s MQM-178 Firejet target drone, they said. The uncrewed aerial vehicle is designed to utilize an artificial intelligence computer
Renewed border fighting between Thailand and Cambodia showed no signs of abating yesterday, leaving hundreds of thousands of displaced people in both countries living in strained conditions as more flooded into temporary shelters. Reporters on the Thai side of the border heard sounds of outgoing, indirect fire yesterday. About 400,000 people have been evacuated from affected areas in Thailand and about 700 schools closed while fighting was ongoing in four border provinces, said Thai Rear Admiral Surasant Kongsiri, a spokesman for the military. Cambodia evacuated more than 127,000 villagers and closed hundreds of schools, the Thai Ministry of Defense said. Thailand’s military announced that
RSS