Defence minister Khaled Nordin said besides cooperating with other friendly nations, the navy could also increase engagement with local defence industry players.

“This (cancelled deal) has strengthened our commitment to enhancing the local defence industry and reducing dependence on external suppliers,” Bernama quoted him as saying after a working visit to inspect the progress of the littoral combat ship (LCS) project at the Lumut naval shipyard in Perak today.

Malaysia is seeking more than RM1 billion in damages from Norwegian defence company Kongsberg Defence & Aerospace after Norway revoked the export permit for the NSM system ordered under a 2018 contract to equip six new LCS.

The number was later reduced to five ships in 2022 following discussions between the navy and the government.

Norway’s foreign affairs ministry said exports of its defence technology would be limited to its “allies and closest partners”, and that the export licence was revoked because of the changing security landscape in Europe and around the world.

Khaled said replacing the NSM system would incur additional costs, including training personnel and integrating the new system with existing platforms.

“The ship has already been fitted with mounting points for the Norwegian missiles. A replacement system from another country may require different mounting configurations,” he said.

Khaled stressed that the issue would not affect the delivery schedule of the navy’s LCS.

He said LCS1 KD Maharajalela is scheduled for delivery in December, followed by LCS2 in August 2027, LCS3 in December 2027, LCS4 in August 2028 and LCS5 in April 2029.