GUP­TAS, ZUMA IN LINE FOR BIL­LIONS

CityPress - - Business - MOYAGABO MAAKE moyagabo.maake@city­press.co.za

Ra­jesh “Tony” Gupta and Duduzane Zuma stand to ben­e­fit from a mul­ti­year in­fantry com­bat ve­hi­cle con­tract with Denel worth bil­lions, which will kick off within the next two years.

The two hold a 25.1% stake in VR Laser Ser­vices through Cray­sure In­vest­ments, a com­pany wholly owned by West­dawn In­vest­ments, ac­cord­ing to the Mail & Guardian. Com­pany records show Gupta and Zuma are di­rec­tors in West­dawn, and both West­dawn and Cray­sure share a reg­is­tered of­fice in Midrand, Gaut­eng.

On its web­site, VR Laser, tucked in a cul de sac in the Boks­burg in­dus­trial area on the East Rand, boasts that it is in­volved in “the sup­ply of steel com­po­nents for the Ar­ma­ments Cor­po­ra­tion of South Africa’s project Hoe­fys­ter, which in­volves a to­tal of 264 in­fantry com­bat ve­hi­cles for the SA Na­tional De­fence Force”.

Denel – the state-owned de­fence, se­cu­rity and tech­nol­ogy solutions com­pany – re­cently re­leased re­sults for the year to March 2014 show­ing rev­enue grew 17% to R4.6 bil­lion and op­er­at­ing profit was up 91%.

It ex­pects “de­liv­ery on key lo­cal de­fence re­quire­ments”, in­clud­ing the re­ju­ve­na­tion of the army’s fleet of in­fantry com­bat ve­hi­cles, to boost lo­cally earned rev­enue in the com­ing years.

This army con­tract, which Public En­ter­prises Min­is­ter Lynne Brown de­scribed as a “R10 bil­lion in­vest­ment by gov­ern­ment in Denel through the depart­ment of de­fence” dur­ing Denel’s AGM ear­lier this month, is called Project Hoe­fys­ter.

When it was un­veiled in 2007 by for­mer public en­ter­prises min­is­ter Alec Er­win, the project was de­scribed as the largest deal in Denel’s his­tory. It in­volves the devel­op­ment and man­u­fac­ture of 264 com­bat ve­hi­cles us­ing scores of lo­cal sub­con­trac­tors, who would be guar­an­teed busi­ness for the next 10 years. The ve­hi­cles will re­place the army’s an­ti­quated Ra­tels, which had been in ser­vice for more than 30 years by then.

The project has been be­set by de­lays, but Denel Land Sys­tems has made a pro­to­type of the Bad­ger in­fantry com­bat ve­hi­cle, with pro­duc­tion ex­pected to be­gin soon.

“Op­er­a­tional test­ing and eval­u­a­tion of the Bad­ger ... are con­tin­u­ing apace with se­rial lo­cal manufacturing ex­pected to start within the next 24 months,” said Vuyelwa Qinga, a spokesper­son for Denel.

The first fully com­pleted lo­cal Bad­ger is ex­pected to roll off Denel’s pro­duc­tion fa­cil­i­ties in Lyt­tel­ton, Pre­to­ria, late in 2016, ac­cord­ing to Qinga.

Gary Naidoo, a spokesper­son for the Gupta fam­ily, did not re­spond to ques­tions on Ra­jesh’s in­volve­ment in VR Laser at the time of go­ing to print.

Denel did not to an­swer ques­tions about who the sub­con­trac­tors were.

“All Denel sub­con­trac­tors are se­lected ac­cord­ing to pro­cure­ment poli­cies ap­pli­ca­ble to state-owned com­pa­nies,” said Qinga.

City Press could find no record of an in­vi­ta­tion to bid for sub­con­tracts in Project Hoe­fys­ter.

Denel group fi­nan­cial direc­tor Fik­ile Mhlontlo said VR Laser was a key in­dus­trial player, but de­nied it was in­volved in de­vel­op­ing the Bad­ger ve­hi­cle.

“We have not fi­nalised sub­con­tract­ing and I con­firm that no Bad­ger work has been sub­con­tracted to them,” he said.

Asked about VR Laser’s claim of in­volve­ment in the Hoe­fys­ter project on its web­site, Mhlontlo said: “I un­der­stand they have an in­ter­est to get in­volved in Bad­ger, but are not in­volved.”

VR Laser op­er­a­tions head Benny Jiyane did not re­spond to re­quests for com­ment.

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