Armscor Quo Vadis?


Armscor, according to its chief executive, is “fully aware the days of transfer payments are diminishing” with ways and means to generate own revenue the watchword at the State-owned company.

Writing in the latest edition of “In and Out”, the official Armscor newsletter, Solomzi Mbada has it the Erasmusrand, Pretoria headquartered organisation had to “quickly adapt to a changing environment fuelled by declining budget cuts as a result of an over-stretched national fiscus. We are expected to do more with less in order to deliver on our mandate as defined in the Armscor Act”.

This, according to him, sees the Armscor board “hard at work to find viable ways to take advantage of market opportunities”.

Armscor’s annual performance plan for the current financial year, published in March, has it the State-owned entity, which resorts in Defence and Military Veterans Minister Nosiviwe Mapisa-Nqakula’s sphere of responsibility, will issue 71 tenders for the wider South African government defence and security sectors before 31 March next year.

Among items listed in the annual performance plan (APP) are any number with basic day-to-day applications for businesses in the wider economy. These include digitisation of records, replacing computer equipment, a unified computing system (UCS) replacement, multi-functional printers and external legal advisors.

When it comes to the nuts and bolts of defence equipment and materiel, the APP list is thin with the Simon’s Town dockyard set to receive new equipment ranging from specialist services for submarine refits and “survey of submarine” to replacement brakes for the synchrolift, capstan repair and servicing, a forklift and “procurement of docking wood”.

The SA Army will be able to better keep its fleet of Olifant tanks clean if a suitable supplier is found for an item termed simply “tank cleaning equipment”.

The Armscor tender portal currently lists just one – a request for offer for the sale of general ship equipment – while there are 13 tenders running with closing dates mostly in August.

Cancelled tenders – also 13 – make for interesting reading. Among them are what is only listed as “onboard installation on three Valour Class frigates” (classified as restricted), supply of Armscor branded souvenirs, a 24 hour security service at Protechnik in Centurion’s Highveld Park, a professional business intelligence service provider, a “co-source partner” for Armscor’s internal audit operation as well as for a new seven-seater vehicle and “procurement of six PC work stations”, also a restricted tender.

Armscor has, according to its tender portal, withdrawn 23 tenders. These include ammunition recovery and disposal at Alkantpan; procurement of weapons systems, withdrawn and no information on what was asked for; a video conferencing system; as well as cleaning, security and gardening services and a feasibility study for a ballistic research test range (presumably planned for the Gerotek facility west of Pretoria as a compulsory pre-tender meeting was scheduled for there). This tender was issued in November 2018, withdrawn a month later and does not appear in the latest tender list.

While not saying it in as many words, African Defence Review (ADR) director Darren Olivier maintains time is ripe for an overhaul at Armscor as well as other components of South Africa’s defence and security manufacturing and supply chains.

Explaining his thinking,he told defenceWeb: “The ongoing budget crisis, caused by a severe mismatch between size, force design, mandate and assigned missions of the SA National Defence Force (SANDF) and the budget it is actually given, can only be resolved by a top-to-bottom rethink of what defence means to South Africa and how it fits into foreign policy, industrial and other strategies.

“This should start with a White Paper and lead into a full new Defence Review with decisions binding on all relevant departments including National Treasury.

“As part of that the role and structure of Armscor needs to be reviewed as well to determine how much of it remains fit for purpose in a downscaled state of defence ambition, what savings can be accrued and whether some of its research and development functions should be combined with the CSIR into a unified Defence Evaluation Research Institute (DERI).”

Olivier is adamant “attempting reform by tasking each organisation and institute with determining and executing own strategies is insufficient for the magnitude of the problem”.

“Bolder action is needed if we’re to save certain defence capabilities from total loss.”