Chief executive says Armscor is taking challenges in its stride

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Armscor will look back on the 2013/14 reporting period with a sense of pride, according to acting chief executive Sipho Mkwanazi, notwithstanding the “challenges and turbulences” the state defence and security acquisition agency had to face.

These included a series of court cases that resulted in the dismissal of the chairman and his deputy and also saw the entire board replaced by Defence and Military Veterans Minister, Nosiviwe Mapisa-Nqakula.

Mkwanazi said Armscor delivered on its mandate in the financial year under review and continued to “adhere to accepted principles of corporate governance and lawfulness”.

An example of this was it receiving a second unqualified report from the Auditor General in March this year. Armscor also retained its level three BEE status.

All acquisition and research and development objectives were exceeded in the past financial year, Armscor’s annual report said. As far as financial performance of acquisition projects was concerned, Armscor achieved the best results in the last five years as regards cash paid against acquisition orders placed, Mkwanazi said.

Insufficient funding remained the most critical challenges faced by Armscor he said, adding this was particularly so in the case of the Naval dockyard at Simon’s Town which until September 2007 was managed and operated by the SA Navy. An Armscor statement issued then indicated “inefficiencies and challenges” experienced by the maritime arm of the SA National Defence Force (SANDF) were behind its control being handed to the acquisition agency.

An indication of the lack of expertise at the facility is the multi-million Rand contract awarded to Durban headquartered South African Shipyards (SAS) for a complete refit, excluding armament, of the Valour Class frigate SAS Amatola.

Funding continues to receive attention internally as evidenced by Armscor posting a surplus of R103.3 million for the 2013/14 financial year. The new board, under the chairmanship of former SA Navy chief, retired Vice Admiral Johannes Mudimu, has “vowed” to continue this trend as well as transforming the agency into a world-class organisation focussing on “excellent client service through the highest standards of quality, efficiency and effectiveness,” Mkwanazi said.

Writing in the annual report, the acting chief executive points out Armscor “has been experiencing strain on its budget for years”.
“This is regarded as a challenge and appropriate strategies have been developed to emerge from this situation as a strong service provider, not only to the Department of Defence (DoD) but also to other government departments such as the SA Police Service and Correctional Services.”



Armscor exceeded all acquisition and research and development objectives in the year under review. As far as financial performance of acquisition projects is concerned, Armscor achieved the best result in the last five years as regards cash paid against acquisition orders placed, he said.