The transfer of the Simon’s Town dockyard to Denel Integrated Systems and Maritime (DISM) is “a work in progress”.
Armscor chief executive Kevin Wakeford writes in the acquisition agency’s latest external newsletter: “A steering committee comprising relevant shareholders has been set up to manage the transfer of the dockyard from Armscor to Denel in line with the Defence Review”.
“The shareholders have agreed on how this transfer should take place. It will happen in compliance with the Labour Relations Act and other relevant legislation.”
Wakeford added the process, once complete, would “revolutionise” the dockyard.
Armscor, Wakeford said, will continue to operate the Simon’s Town dockyard until the transfer to Denel takes place. He did not give any indication of when the transfer would be complete or whether Armscor would be actively seeking business for the facility, a national asset, while it retained management control.
In May last year Defence and Military Veterans Minister Nosiviwe Mapisa-Nqakula announced that control of the dockyard was returned to the Navy. However, Denel Integrated Systems and Maritime (Denel ISM) in September 2016 was announced as being selected to take over the management of the dockyard, while Armscor will act as the procurement agency interfacing between the Navy and Denel ISM. The actual transfer of management and control of the dockyard to Denel ISM will take place six months after certain conditions are met, it was announced.
The naval dockyard in Simon’s Town has experienced numerous problems and challenges, including insufficient capacity and manpower, capabilities and insufficient funding.
“Denel Integrated Systems & Maritime is set to assume the role of strategic partner to the SA Navy, as well as the broader SA shipbuilding and repair industry. The maritime division of the business has given Denel a strong foothold in the naval environment and the company is confident it will become a catalyst in a number of maritime defence acquisition programmes currently in the pipeline,” Denel Acting CEO Zwelakhe Ntshepe said in September last year.
During last September’s Africa Aerospace and Defence (AAD) exhibition Denel signed a memorandum of understanding (MOU) with Poly Technologies, part of China’s state-owned Poly Defence Group. It was said at the time of the signing that Poly Technologies aimed to take a stake in the Simon’s Town shipyard and join Denel in constructing three naval vessels. A statement indicated both parties would collaborate in the rejuvenation and growth of the South African maritime sector.
However, Damen Shipyards Cape Town was in February named as the preferred bidder for the supply of three inshore and three offshore patrol vessels to the SA Navy under Project Biro, which has been deferred to the 2018/18 financial year with only Project Hotel (the acquisition of s new hydrographic capability for the maritime arm of the SA National Defence Force (SANDF) approved for the current financial cycle. The preferred Hotel bidder is Durban-based Southern African Shipyards (SAS).
This leaves some doubt as to Poly Technologies’ involvement in Biro and the Simon’s Town dockyard as China was bidding for the Biro and Hotel contracts and should it have won, would have built the vessels in Simon’s Town or Durban.