DA not impressed with Rheinmetall Denel involvement in Saudi armaments factory


The opposition Democratic Alliance (DA) party wants to know why a South African company has been an integral part of setting up a factory to manufacture ammunition for a number of different weapons in Saudi Arabia.

Quoting the Saudi News Agency on the opening ceremony, the party’s shadow defence minister, Kobus Marais, wants a ministerial answer as to why South Africa has partnered with Saudi in the production of weapons and armaments.
defenceWeb published the story on the Saudi munitions factory on April 4. This publication also made mention of President Jacob Zuma’s presence at the opening alongside Deputy Crown Prince Mohammed bin Salman.

Marais wants Parliament to be briefed by Defence and Military Veterans Minister Nosiviwe Mapisa-Nqakula on why neither Parliament nor the National Treasury was advised on “a new arms merger” between South Africa and Saudi Arabia. He also wants her to tell the country which countries, besides Saudi, will use armaments produced by the factory, built by Saudi’s Military Industries Corporation in conjunction with Rheinmetall Denel Munition (RDM).

The new facility in Al-Kharj, 77 km south of Riyadh, is able to produce 60, 81 and 120 mm mortars, 105 and 155 mm artillery shells and aircraft bombs weighing from 500 to 2 000 lb. The facility is expected to produce 300 shells or 600 mortar rounds a day, according to Mohamed Al-Mady, head of Saudi Military Industries Corporation. He added the facility would be managed by 130 engineers and operators. RDM was reportedly paid in the region of $240 million for its services and with operate the factory in conjunction with the Saudi Military Industries Corporation.
“Parliament cannot allow history to repeat itself,” Marais said in reference to the 1999 Arms Deal, “and must satisfy itself that taxpayers’ money is not being pilfered to fund dodgy arms deals in discord with South Africa’s non-violent human rights-based foreign policy.”

The State-owned defence industry conglomerate, Denel, entered into a joint venture with United Arab Emirates company, Tawazun Holdings, more than two years ago to produce the Al Tariq precision guided missile. It is also in a partnership with Brazilian defence industry companies to design and build the A-Darter missile. It does not appear the DA has objected to these partnerships, nor the various other ammunition factories that Rheinmetall Denel Munition has set up elsewhere in the world – the company has established ammunition filling plants in three dozen different countries over the last three decades.

Meanwhile, another proposed offshore venture by Denel to establish a presence in the Far East based in Hong Kong via a joint venture with the Gupta associated company, VR Laser, is presently on hold while National Treasury investigates.
“Denel will continue to engage with Treasury to ensure any misunderstanding between Denel and itself about the Denel Asia joint venture is resolved amicably,” Denel group executive: communication and public affairs, Vuyelwa Qinga, said this week.
“National Treasury is currently engaging directly with Denel on the matter,” said Treasury in a statement on Wednesday. Treasury stated that state-owned entities are required to obtain approval from the Minister of Finance and/or Minister of Public Enterprises before establishing companies, in terms of the Public Finance Management Act (PFMA).

In terms of the conditions attached to the R1.85 billion in guarantees that have been provided by government to Denel, any significant transactions that Denel enters into require the approval of both the Ministers of Finance and Public Enterprises, said Treasury.

It said Denel submitted its application in terms of Section 54(2) on 10 December 2015.
“However, prior to Denel submitting its application, National Treasury had outlined the information that would be required to comprehensively assess the application. The Minister of Finance is still considering this application, and further information has been requested from Denel.”