Armscor should support the entire SA defence industry, not concentrate on Denel

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Ahead of the planned South African defence industry (SADI) lekgotla, a Pretoria-based industrialist maintains it’s time to stop “Denel bashing” and look to Armscor and its obligation to protect SA National Defence Force (SANDF) interests.

The lekgotla is set down for June/July and will be hosted by Defence and Military Veterans Minister Thandi Modise. The SA Aerospace, Maritime and Defence Industries Association (AMD) said Modise has directed the lekgotla, postponed from last year, be convened as soon as practically possible, with a firm date and venue yet to be determined.

Andy Hodgson, ADG Mobility Executive Manager, Business Development, candidly admits putting politics aside and starting on level ground is a major ask in the local defence industry. To clarify, he adds “well run and functional businesses in the sector should be able to interact on a sound commercial footing, follow simple supply and demand dynamics, ideally with healthy competition”.

“Ideally, and broadly, it is supposed to work like this,” he explains. The SANDF needs capabilities and raises its requirements with Armscor, which applies its knowledge and experience to issue RFIs (requests for information) and RFQs (requests for quotation) to the SADI. Then capabilities are offered by reputable and vetted industry, who respond promptly. Armscor vets, audits, inspects and awards and manages contracts. Work is then executed, overseen and assured by Armscor (with their mandate to commercially protect the SANDF’s interests).

“The entire process could and should work, while accepting national BBBEE goals and objectives and applying fair scoring accordingly,” he observes, adding “it’s critical to note Thandi Modise, as Minister of Defence and Military Veterans (DoDMV), has both the SANDF and Armscor in her portfolio, so no conflicts exist”.

Hodgson notes what he terms “some blurred lines” between Minister Pravin Gordhan’s Department of Public Enterprises (DPE), government’s shareholder in Denel, and the DoD.

“This creates an unnatural thorn in the side of the process I suggest with the historic remnants of a crippled Denel draining all available funding in the hope of some ‘miraculous resurrection’ to a long bygone capability.

“What used to be a national asset is these days, without any doubt, a national liability and the pain and fear of simply ‘letting it go’ is too hard to imagine ‘politically’,” he told defenceWeb, adding the result is an SANDF that isn’t getting any value for its money – “the little there is”.

“Government,” he said, “needs to recognise and accept Denel is not the only show in town and take a long and cautious look at what real technical capabilities still exist in it”.

Going further, Hodgson feels “Denel bashing is a waste of time” and more attention should be focussed on Armscor and its obligation to protect SANDF interests. At the same time Armscor – “to at least some degree in its own interests” – should support the wider local defence industry. An approach of this nature would stimulate healthy competition, new local ingenuity and fresh synergies all ultimately to the advantage of the national defence force.

His final take is Armscor doesn’t have a mandate to support or “falsely prop up Denel”.

“Armscor needs to answer to the Minister of Defence and the SANDF, not to DPE/Denel and they should be encouraged to start to cast the net wider, reduce red tape, stimulate private research and development as well as get best products on the best time scales for the best value for money for taxpayer Rands.”