Denel’s decline cripples defence force, too

● SA’s primary arms manufacturer, Denel, and the South African National Defence Force (SANDF) are joined at the hip. If one fails, the other will follow.

The second Zondo commission report, released this week, reveals the role of the Gupta cabal and other state captors in the decline of Denel, a state-owned enterprise that from 2011 until 2015 achieved 88% of its business targets.

Denel was well on its way to becoming an established global arms supplier when the defence budget and orders from the SANDF were already in a downward spiral. Denel was maintaining its manufacturing capabilities with a full order book from other countries, keeping the gears moving to supply the SANDF whenever it had some cash.

The first defence project to come to a grinding halt was Hoefyster, the multibillion-rand project to supply the SANDF with new armoured personnel carriers.

It was the first project in the crosshairs of the state captors when the contract to supply armoured steel for the vehicles was removed from one of Denel’s divisions to Guptalinked VR Laser.

Hoefyster is more than 50 months behind schedule. Deputy defence minister Thabang Makwetla told the portfolio committee on defence last year that the project is “in the middle of nowhere”.

The SANDF’s existing armoured vehicles are more than 40 years old.

As the Zondo report points out, the replacement or firing of Denel’s efficient managers stripped the company of its competence. The effect was clear when the SANDF had to deploy thousands of soldiers during the riots in KwaZulu-Natal and Gauteng last year.

Soldiers had to be transported by bus and hired vehicles because the SANDF’s main mission vehicles were in such a sorry state. The South African Air Force has two serviceable Hercules C-130 transport aircraft on a good day.

They were purchased in 1963, and even the most valiant of efforts won’t be enough to keep them going much longer.

Denel Aeronautics is the primary contractor to maintain the air force’s aircraft. It is also the original equipment manufacturer for the Rooivalk combat support helicopter and the design authority for the Oryx helicopter and the fighter aircraft.

That means the air force has no other option available for the upkeep of these aircraft.

SA’s internal upheavals were barely contained last year when the Islamic extremist insurgency in northern Mozambique became critical.

The Southern African Development Community had to intervene and, with Mozambique on its doorstep, SA was picked as the lead country for the Sadc mission in Mozambique (Samim).

The SANDF could muster some 400 of a promised force of 1,500 for Samim in part because few of its armoured vehicles would have made it to the Mozambican border. Samim had originally hoped for at least two Rooivalk and four Oryx helicopters. The air force could provide only two Oryx helicopters. A number of Rooivalk helicopters are standing stripped for spares at Denel. Only 10 Oryx helicopters are available for use.

SA’s Gripen jets, the air force’s primary fighter aircraft, were grounded last year due to budget shortfalls, having no service contracts in place and a lack of spares. A number of the jets have been cannibalised for spares.

Samim had hoped for at least one frigate and one submarine, but the navy could only muster a single patrol vessel, which then had to withdraw due to technical problems. None of its other vessels were seaworthy.

Denel’s contracts with other countries have mostly been wiped out by its financial woes, while staff with expertise left in droves after the state arms supplier could no longer pay salaries each month. Suppliers would deliver components only if paid upfront. Denel’s bill for outstanding salaries, benefits and taxes in August 2021 amounted to more than R620m.

The defence budget has been in a steady decline for years, to a point where the SANDF has been decimated. State capture and the Gupta lieutenants played their part in the decline on Denel’s side. The SANDF needs Denel to provide the gears for the military machine to move forward. Right now, that machine has all but died.