Workers fear China designs on navy docks
Denel and Armscor may sell out Simon’s Town yard to foreign interests, warns maritime expert
TARGETED: China may soon build vessels at naval dockyards near Cape Town THE navy faces an internal revolt amid fears that China may soon build vessels inside South Africa’s naval headquarters.
The two main trade unions of the dockyard workers this week said their members were unhappy over a possible “Chinese takeover” of the naval dockyard in Simon’s Town.
The National Education, Health and Allied Workers’ Union and the United Association of South Africa have separate disputes with Armscor, which manages the dockyard for the navy. The disputes arose after reports that the facility was to be handed to state-owned defence equipment firm Denel early next year.
Denel has signed a memorandum of understanding to team up with China’s Poly Technologies, a state-run defence manufacturer, to help with shipbuilding and ship repair.
In terms of the agreement between Denel and Poly Techologies, the Chinese firm would make a significant investment in the ailing Simon’s Town facility in return for boatbuilding business.
The Chinese firm is Denel’s bid partner in two navy tenders, projects Biro and Hotel, worth around R10-billion.
The unions’ move coincides with growing unhappiness in shipbuilding and naval ranks about Denel’s business proposition, which was made public in September.
Several maritime sources confirmed widespread unhappiness over “irregularities” related to the Biro/Hotel deal, including a long delay in announcing the winning bidders.
The sources claimed the delay was related to “backroom” negotiations to accommodate Denel and Poly Technologies among the preferred bidders.
Sources involved in the procurement process said Biro/ Hotel bids had been evaluated, with local shipbuilders likely to get the lion’s share of work.
However, there appeared to be high-level political interference aimed at securing a role for Denel and the Chinese.
“Why is Denel being accommodated when they have absolutely no maritime experience?” asked a source with knowledge of the deal.
Many who were prepared to NAVAL HOME: Dockyard facility at the South African Navy’s headquarters base in Simon’s Town, near Cape Town speak did not want to be named for fear of victimisation.
Another senior shipbuilding source said: “The delay in the [Biro/Hotel] announcement is due to the higher authorities trying to find a place for Denel.”
Concerns about political interference have also surfaced in a memo circulating in the naval community. Written by another maritime expert — and independently verified by the Sunday Times — the memo warns that Armscor and Denel appear to be willing to “sell out” to foreign interests, possibly for purely financial gain.
“Denel’s task is to manage the dockyard and maintain the ships of the fleet, not to build ships without a shipbuilding yard of their own and use a national facility like the Simon’s Town naval dockyard instead,” the memo said.
In a statement issued in September during the African Aerospace and Defence Expo at Air Force Base Waterkloof, Denel said the deal with Poly Technologies involved “collaboration” in the maritime sector.
“The agreement will cover areas such as ship repairs, shipbuilding, naval systems and marine services,” Denel said.
According to the memo, Poly Technologies has agreed to invest up to R800-million in Simon’s Town if Denel won a share of the Biro/Hotel procurement deal involving several inshore and offshore patrol vessels and a hydrographic survey vessel.
Shipbuilding sources close to Biro/Hotel this week confirmed that:
After bids had been finalised, the tender process was unexpectedly reopened late last year to accommodate additional bidders, including Denel;
The long delay has prompted fears that sensitive bid information may have leaked to rival bidders, compromising the process; and
Armscor is under pressure to finalise the deal or risk losing a R2-billion budget allocation. The amount has already been rolled over for one financial year.
Defence commentator and author Helmoed Heitman, a consultant to the South African De- fence Review, also questioned China’s potential involvement with the navy.
“It’s one thing to bring a foreign warship that you’re doing a refit on, but another thing entirely to have a bunch of foreigners forming part of the family,” Heitman said. Poly Technologies would effectively be inheriting state infrastructure.
Uasa regional organiser Andre van Zyl said the union had declared a dispute with Armscor regarding workplace conditions. The Denel transfer and joint venture with the Chinese was one of its concerns.
“The key issue is that nobody knows where anything is at. These guys [dockyard workers] have been beaten up, some of them for 22 years, regarded as fixed-term contractors with less benefits than anybody else. Their fear is they might not get permanent employment if the Chinese come in,” said Van Zyl.
Nehawu’s Ronald Mbala confirmed “anxiety” around the Chinese deal.
Poly Technologies could not be reached for comment. The navy referred queries to the Department of Defence. Spokesman Siphiwe Dlamini said it was not aware of any concerns.
“It must be noted that any labour transfer will be in accordance to the legislation and in this regard it will be a transfer as a going concern in line with the Labour Relations Act,” he said.
Denel spokeswoman Pam Malinda said the company had yet to sign a formal agreement with Poly Technologies.
Denel’s task is to manage the dockyard, not to build ships These guys have been beaten up, some of them for 22 years
Comment on this: write to tellus@sundaytimes.co.za or SMS us at 33971 www.sundaytimes.co.za