Minister sure current SA Navy build projects will be funded


How quickly things change is what has to be asked following the Ministerial response to a question on the future of two SA Navy build projects.

The projects are Biro for three inshore patrol vessels (downgraded from six, three of which were offshore patrol vessels) and Hotel to replace the hydrographic platform SAS Protea (A324). Both are currently underway and contribute to Operation Phakisa, government’s long-term initiative to substantially boost South Africa’s oceans economy.

At the beginning of September Parliament’s Joint Standing Committee on Defence (JSCD) heard the Department of Defence’s (DoD) strategic capital acquisition master plan (SCAMP) funding for the two SA Navy projects and the extensively delayed new Badger infantry combat vehicle for the SA Army had a shortfall of R2.8 billion. Funding needed by Armscor to honour all three is R13.7 billion, leaving an almost R11 billion shortfall.

Barely three weeks later, answering a parliamentary question, Defence and Military Veterans Minister Nosiviwe Mapisa-Nqakula indicated there is sufficient funding for both naval projects.

“In spite of the decline in the capital budget of the Department of Defence (DoD) which forms part of the Special Defence Account (SDA), sufficient funding is available to fund both projects Biro and Hotel,” her written response to a question asked by Democratic Alliance (DA) shadow defence and military veterans minister Kobus Marais stated.

“Neither of the projects will be delayed as a result of insufficient funding and Armscor will not be defaulting on any contractual payments. The worsening rate of exchange of the SA Rand against the Euro and other major currencies is placing significant pressure on the available budget for both projects. The DoD has to date been able to provide sufficient funding to maintain the required budget for the projects.

“Some delays on both projects have been incurred as a result of the COVID-19 lockdown and the resultant inability to import critical sub-systems. Both projects are endeavouring to make up delays.

“At present, Project Biro is still expected to deliver the first vessel on time (January 2020) and a number of the contractual deliverables on Project Hotel have been completed ahead of time,” her response read. The minister presumably meant January 2021 as per Armscor’s timeline.