New timelines for Project Hoefyster

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Denel is proceeding with work to complete the development of the Badger infantry fighting vehicle (IFV) under Project Hoefyster, and expects to establish a product baseline for the five main variants by the end of 2025.

In a presentation to the Portfolio Committee on Defence and Military Veterans (PCDMV) in mid-September, Armscor gave an update on the Badger programme, reminding the committee that an April 2023 Project Hoefyster Project Control Board (PCB) meeting recommended that Phase 1 (development) be completed, although “with acceptance of indicated specification deviations”.

The PCB meeting also recommended the four pre-production models that have already been manufactured be accepted, and that one battalion worth of vehicles be delivered to the SA Army (Armscor ultimately wants three battalions worth of vehicles delivered). The Phase 1 contract has to be amended to provide for the new completion dates, and possible consideration of penalties.

On 10 August, Denel asked Armscor for a Phase 1 contract variation order (CVO), which provides for new completion dates and accelerated payment milestones. Under the new schedule, product baseline for the Section variant is expected in April 2024; the Fire Support variant in July 2024; the Command variant in December 2024; the Missile variant in March 2025; and the Mortar variant in December 2025. Product baseline was originally scheduled for late 2017.

Armscor said it “is currently processing the Phase 1 CVO” while Denel is currently busy with costing of production (Phase 2) “and have indicated that they will only be in a position to provide definite costs by end of December 2023.”

Armscor added that it will process the Phase 2 contract variation order once approval for partial acquisition of one battalion (88 vehicles) at the indicated cost has been obtained from the Armaments Acquisition Council.

Project Hoefyster phase one – for the design and development of five main variants – came into effect in June 2007 with a contract value of just over a billion Rand (at 2006 Rand value) with delivery expected in May 2012. This was to be followed by phase two – industrialisation and production of 238 Badgers – with a completion date of November 2023. That not much of this happened is common knowledge, with blame variously laid at the doors of mismanagement at Denel, the State-owned defence and technology conglomerate awarded the contract by Armscor, and state capture.

Denel in March this year received billions of rands in bailout money from National Treasury, allowing it to restart much of the production at its facilities that have been dormant for years due to the fallout from state capture and mismanagement.

Denel Chief Restructuring Officer Riaz Saloojee told defenceWeb earlier this year that the company was confident it can get Badger production back on track for the South African Army, in spite of Armscor’s identified risks of subcontractor delays due to Denel’s financial situation and the departure of Denel personnel.

To date, R7.6 billion has been spent on Project Hoefyster, with R2 billion in advance payments owing, according to Armscor. Factoring in VAT, escalation and other costs, Armscor values the project at over R16 billion.