Badger IFV cost almost doubles

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Defence and Military Veterans Minister Nosiviwe Mapisa-Nqakula has informed Parliament the cost of the SA Army’s new infantry fighting vehicle (IFV) – the Badger – has almost doubled from the original estimate of R8 billion to R15.4 billion.

She was answering a question from opposition Democratic Alliance (DA) party shadow defence and military veterans minister, David Maynier. In response he described the cost escalation as a bail-out for the vehicle’s manufacturer Denel Land Systems (DLS).

The order for the 238 vehicles, trimmed down from 264, is seen as essential to the survival of DLS, Business Day reported him as saying.

Mapisa-Nqakula’s reply indicated the acquisition plan for the new IFVs and the relevant financial authority was approved a year ago and “the total cost authorised is R15.4 billion including future escalation, rate of exchange adjustments and Value Added Tax (VAT)”. She declined to give more details of project costs and planned life cycle of the vehicles saying these would be discussed behind closed doors in the Joint Standing Committee on Defence.
“The total requirement of 264 vehicles as per the SA Army requirements was acknowledged, but because of available funds for the project, approval for 238 vehicles was granted to remain within the allocated funds,” the Minister said.

Maynier said there were several red lights flashing regarding Project Hoefyster (the new IFV). These included the acquisition being approved and signed in secret, the “massive cost escalation” and the absence of a detailed briefing to Parliament.
“Another concern is it was approved and signed before the Defence Review was completed. I suspect this is a well-disguised bail-out for Denel,” the paper reported him as saying.

Military analyst Helmoed Heitman told Business Day the cost increase could be due to inflation as the original project was mooted some five years ago. The current contract also included spares, an item not in the original estimate.

Badger production is set to take place over ten years and the price “would have to make provision for inflation over that period”.

DLS chief executive Stephan Burger said industrialisation of facilities in Lyttelton, Centurion started in November with manufacturing set to get underway in early 2015.

The full fleet of Badgers will replace the Army’s ageing Ratels when deliveries conclude by the end of 2022.

Burger said the Badger is a combination of a locally designed turret and a Finnish vehicle (Patria), customised for South African conditions.
“The system will be produced locally and is the apex of the South African defence industry,” he said during a DLS open day in November.
“It will provide South Africa’s soldiers with unrivalled firepower, mobility and maximum armoured protection. The SANDF will have an adaptable and flexible vehicle that can be used with equal confidence in both high-intensity warfare and peace support operations.”

The Badger will be fitted with a modular turret system, developed in five variants – section, command, mortar, missile and fire support. A single turret structure with different weapon modules will simplify and reduce through-life cost support.