If you've ever had to critique a book that was riddled with flaws, you know how uncomfortable it makes you feel. You don't want to crush the author's dreams, but someone needs to tell them the truth. They have worked long and hard on this book and yet, they missed the mark for some reason or another.
Try to find something positive about it. Maybe the story has great potential, or they built up a great climax and surprise ending. You should be able to find something to encourage them. Then read this post by Brian McKenzie http://www.superheronation.com/?s=how+to+critique+works+that+you+find+awful and gently tell them what they should work on.
As a writer, they will have to accept criticism, but you can deliver it as kindly as possible so you don't hurt their feelings too much and cause them to give up.