Life being breathed back into Hoefyster – with conditions

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As Denel readies itself to become a properly functioning entity, the State-owned defence and technology conglomerate appears to have an ally in the form of the also State-owned defence and security acquisition agency Armscor for Project Hoefyster.

Under Project Hoefyster, Denel Land Systems (DLS) was contracted to manufacture the Badger infantry fighting vehicle to partially replace the SA Army’s ageing fleet of Ratels. With the project now well into its second decade, there have not been any deliveries, largely due to state capture at Denel. The decline of the Lyttelton, Centurion, based DLS, once billed as a prime contractor, system integrator and sub-system and product supplier, was put firmly at the door of state capture with Gupta affiliate VR Laser allegedly in the vanguard.

That the landward force would go into the future without the new wheeled fighting vehicles Project Hoefyster envisioned was not entirely written off by Defence and Military Veterans Minister Thandi Modise. Responding to a Parliamentary question in May this year, she conceded there was no progress, with Armscor recommending cancellation of the contract, but didn’t shut the door.

That is now water under the bridge with this week’s Armscor presentation to the Portfolio Committee on Defence and Military Veterans (PCDMV).

In part, the presentation has it “completion of phase one of Project Hoefyster is deemed by both Armscor and Denel to be feasible” with conditions. These include end-user agreement on “waiving non-compliance to identified specifications”; suppliers willing to supply required sub-systems and components; availability of sufficient working capital to continue the project and Denel insourcing necessary personnel.

The PCDMV heard Hoefyster as a project has to be financially ring-fenced with Denel to “find ways of providing bridging funds from existing project funds to restart the programme until payment milestones can be reached”. Denel is working on “a request for contract variation” that, once approved by Armscor, will see more regular payments as progress is achieved, facilitating release of funds to provide for labour and supply chain requirements. Armscor will also be asked to waive penalties on outstanding penalty milestones.

Acceptance of waiving of non-compliances will enable Denel to continue rectification of outstanding non-compliances and complete the Section v ariant development, leading to product baseline level being reached.

“The successful completion of phase one of the project will provide a much needed boost for a significant number of SMMEs that provide components, subsystems and services to the Hoefyster project,” Armscor reported.

“The outstanding work to complete phase one will mostly be performed in-house at Denel, as the vehicle hardware in the main already exists. Armscor requested the SA Army requirement for continuation of phase two (industrialisation and production) be reviewed. Armscor will prepare options with regard to continuation of the project, while taking cognisance of availability of funds.”

Hoefyster is, as far as can be ascertained, presently paused with six parts of the development phase at various stages of completion. They are 72% of hull and turret items common to all variants; 84% of the lead – Section – variant; 83% of the Fire Support variant; 73% of the Command variant; 44% of the Mortar variant and 53% of the Missile variant.

Completed as per phase two (industrialisation and production) started over nine years ago are 33 locally developed main weapon CamGuns and ammunition; 60 mm long range mortar bombs; 15 Patria vehicle platforms; 64 training simulators and four pre-production models of the Section variant.

The original Hoefyster requirement was for 264 IFVs – three battalions – in five variants (Section, Mortar, Fire Support, Command and Missile) with the contract coming into force in June 2007. The original delivery period was set down to start in May that year and end five years later in 2012. Contract value according to the Armscor presentation is R1,048,673,907 in 2006 Rand value.