Desperate efforts by the SA National Defence Force (SANDF) to salvage at least some of the more than R7bn it invested in projects in Denel might also lead to the latter’s liquidation.
At the same time, the demise of Denel’s capabilities to support the SANDF, in particular the SA Air Force (SAAF), combined with the equally decimated defence budget, means the air force only has 46 serviceable aircraft of a fleet of 209.
The dire state of affairs was spelt out on Wednesday during a briefing to parliament’s joint standing committee on defence.
“This is such a grim picture. Any country at least maintains its core defence capabilities as the future threats are unknown now. Ten years ago we did not know that we would have an [extremist] threat on our northern borders,” committee chair Cyril Xaba said after the briefing.
“This is impacting the very core of our ability to protect the country’s sovereignty.”
Solomzi Mbada, CEO of Armscor, said cancelling Project Hoefyster, one of the key projects between the SANDF and Denel to provide 264 infantry combat vehicles, will probably lead to Denel’s liquidation. It will also end SA’s sovereign capability to produce armaments.
The SANDF, equally desperate to salvage at least R1.4bn in bank guaranteed payments to Denel for manufacturing the vehicles, could use this money to upgrade existing vehicles or buy other, immediately available alternatives.
This is such a grim picture. Any country at least maintains its core defence capabilities as the future threats are unknown. Ten years ago we did not know that we would have an [extremist] threat on our northern borders.
— Cyril Xaba, chairperson of the standing committee on defence
Hoefyster, the single biggest Denel project to be adversely affected by state capture when the project was transferred to the now defunct and erstwhile Gupta-controlled VR Laser, is now 10 years behind production.
Not even the design phase of the project is complete. According to Mbada, Denel is not in a position to finish it due to insufficient manpower, financial challenges and obsolescence of critical subsystems.
Armscor recommended the contract be scrapped and called up guarantees held by various banks.
A suggested solution is to use the money to upgrade the army’s Ratel combat vehicles, which date back to 1976. That, however, is not necessarily economically viable as it would mean stripping the vehicles to their shells.
Apart from the army, the air force finds itself in an even bigger dilemma, with Denel being the original equipment manufacturer of Oryx and Rooivalk helicopters. That means there is no other manufacturer that can maintain and support the aircraft.
Now, also due to budget shortfalls, only 17 of the air force’s 39 Oryx helicopters are serviceable. Of the 11 Rooivalk helicopters, only four are in service, with three doing duty on the Democratic Republic of the Congo’s UN mission.
All 26 Saab Gripen fighter jets have been grounded due to service support contracts having lapsed. Five of the 24 Hawk light fighter trainers are in use.
At present the Air Force cannot do any basic flying training on its Pilatus PC-7 aircraft because the support contract has also lapsed. Prospective Air Force pilots are undergoing basic flying training in Cuba.
Not even the VVIP jet fleet, including Inkwazi, the presidential jet, has escaped the crisis. Only two out of five jets are serviceable, with Inkwazi, a Boeing Business Jet, and the number two aircraft, a Falcon 900, out of action.
If Denel goes under we have very little if any manoeuvring space.
— Lt-Gen Wiseman Mbambo, chief of the air force
Lt-Gen Wiseman Mbambo, chief of the air force, confirmed in the meeting that his pilots are not combat ready as the restricted budget and shortage of aircraft do not provide enough flying hours to pilots to maintain their readiness.
Not one of the four Lynx maritime helicopters which were bought as part of the multibillion-rand arms deal to serve on the then new frigates is flying. Of the 30 Agusta light-utility helicopters purchased under the same deal, only three are serviceable.
“If Denel goes under we have very little, if any, manoeuvring space,” Mbambo said.
Thandi Modise, minister of defence and military veterans, said parliament supported the acquisition of much-needed defence equipment in the 1990s when the arms deal was negotiated.
“Sadly, the unity is very weak [in parliament at the moment] towards the department of defence. We will need to fix our financials and divert funds [to save the SANDF]. We need to turn everything upside down to have a re-look at how maintenance is structured.
“We will have to decide what we do with the carcasses and what we can sell. Government is expecting a lot from the SANDF, but rearmament while depending on the state is currently not possible. We will have to put our heads together to see how we can at least achieve minimal improvements.”
In the past the strategic defence account was used to fund major acquisitions. Budgeted project money was also paid into that account to ringfence it. Treasury closed the account about two years ago because of irregularities. That left a number of defence projects in a predicament because of advance payments suddenly being unfunded.
We will have to decide what we do with the carcasses and what we can sell.
— Thandi Modise, minister of defence and military veterans
The equipment procured under the strategic defence programme of the 1990s was also maintained and upgraded by funding from this account.
According to Sonto Kudjoe, the secretary of defence, R1bn could be salvaged from Treasury to fund at least two of the navy’s projects. These are projects Biro and Hotel. Biro provides for three inshore patrol vessels manufactured by Damen Shipyards in Cape Town. The first of the three is undergoing sea trials, with the second and third vessels well under way.
Project Hotel involves a new hydrographic survey vessel. This and its systems are also nearing completion at Durban-based Southern African Shipyards (SAS).
According to Kudjoe, the department of defence’s accounting officer, a serious revision is needed to determine “what we have and what we don’t have”.
“We don’t want to be in a position where we are wholly dependent on other countries to obtain armaments.”
Kobus Marais, the DA’s spokesperson on defence, said after the meeting: “The ANC executive, including the president, Cyril Ramaphosa, as commander-in-chief; the minister of defence; the minister of finance; the minister of public enterprises; the chiefs of SANDF, air force, army and navy must take full responsibility and must be held accountable for the near-total destruction of our military prime mission equipment. This is unforgivable.”
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