MPs told to wait on Denel move

PARLIAMENTARIANS have been told to wait for the outcomes of the review of state-owned entities (SOEs) before Denel is shifted from the Department of Public Enterprises to the Defence Department.

MPs wanted to know about the delay in transferring Denel to defence when the National Conventional Arms Control Committee (NCACC) annual report showed that exports of arms and weapons had declined from R4.1 billion recorded in 2016 to R3.4bn.

The number of export permit contracts authorised had also declined from 2 913 to 1 682 in the year under review.

Defence Minister Nosiviwe Mapisa-Nqakula and Energy Minister Jeff Radebe last week presented the 2017 annual report of the NCACC to the joint standing committee on defence.

The ANC’s Dumisani Gamede said export in heavy weapons was critical to the country’s economy.

Gamede also said Denel was in bad shape amid the decline in exports of weapons.

“At a certain stage it was reported that it was to be transferred to the Department of Defence. Some of us believe in that,” he said.

The DA’s Shahid Esau said the decline in exports of heavy equipment was causing a dent in revenue generation.

UDM leader Bantu Holomisa said the country was not marketing its products.

“We have sophisticated technology. We need to change the tactics a little bit,” Holomisa said.

Radebe, who chairs the NCACC, said there was a committee chaired by President Cyril Ramaphosa to look at the state of SOEs.

“We should await the outcome of that process,” Radebe said.

Mapisa-Nqakula said the 2016 report had painted a glowing picture of the defence industry, but Denel had since then encountered problems.

“The problems have impacted on the rest of the industry, particularly small companies,” she said.

The minister said Denel had been living from hand to mouth as money received was spent on salaries instead of production of equipment for orders placed with the SOE.

“The situation has been so bad that it has impacted on the special defence account,” Mapisa-Nqakula said.

However, she said there was “an intervention” being made at Denel with the new board appointed and acting chief executive in place.

Mapisa-Nqakula said the decision on the future of Denel lay with Ramaphosa. “It is not going to take a day or two, it’s going to be a process.”

She said that the transfer of Denel would still be a challenge while the SOE was costing taxpayers.

“There has to be due diligence undertaken and timeframes set.”

Mapisa-Nqakula insisted that it would not be advisable to continue with Denel in the manner in which it was structured and money spent on chief executives of its subsidiaries.

“This is one of the matters to be considered,” she said.