Armscor processes for evaluation, selection and affordability are standing in the way of kickstarting one of the biggest projects in the South African shipbuilding industry, identified as a major component of the blue economy sector of Operation Phakisa, the Presidential initiative to boost South Africa’s economy.
When finalised, the tenders for Projects Hotel and Biro currently under scrutiny by Armscor naval specialists and SA Navy representatives will see seven new platforms built for the SA Navy, with a 60% local content as specified in the National Treasury Instruction for Working Vessels.
Marine transport and manufacturing activities including coastal shipping, trans-shipment, boatbuilding, repair and refurbishment are some of the focus areas of the blue economy sector of Operation Phakisa, publicly unveiled by President Jacob Zuma in October 2014 north of Durban. The winning tenders are expected to boost the South African shipbuilding sector and bring it into line with Operation Phakisa projections.
Project Hotel makes provision to replace the Navy’s ageing hydrographic vessel, SAS Protea, while the tender associated with Project Biro will see six new hulls delivered to the maritime arm of the SA National Defence Force (SANDF). The three each of inshore and offshore patrol vessels are expected to be utilised solely to protect South Africa’s maritime resources and will be backed by the naval heavyweights that are the Valour Class frigates and Heroine Class submarines.
Protection of marine resources is also a focus of Operation Phakisa’s blue economy sector. It is expected to, together with ocean governance, become a major part of naval activity.
The closing date for tenders to build a new hydrographic vessel was late in April last year following a bidders’ conference in Simon’s Town attended by 12 shipyards, although this was extended to 30 June. The conference was called because of the complexity of the tender and to allow prospective bidders to ask questions for clarity.
Armscor indicated, after tenders called for in terms of Project Hotel had closed, that it could take up to a year before any announcement as regards a successful bidder can be made. Again this was said to be the result of the complexity of the tender.
Approached for comment on progress this month, Lulu Mzili, Armscor General Manager: Marketing And Business Development, said the hydrographic vessel tender was still going through Armscor internal processes for evaluation, selection and “consideration of affordability”.
Tender submissions for Project Biro, the supply of six patrol vessels (three inshore and three offshore) were to close on 30 June last year, again after a bidders’ conference in Simon’s Town, but this was extended to 30 September.
Armscor has not, to date, indicated how many tenders were submitted or when any announcement as regards a successful tenderer can be expected.
Again, the official line is “still going through Armscor internal processes”.
Mzili is also on record as saying “only once Armscor has completed evaluation and identified potential prime contractors, will submissions go to a higher authority for approval”.
The “higher authority” is Secretary for Defence, Dr Sam Gulube. Once this approval has been obtained the final stop in the approval chain is Defence and Military Veterans Minister, Nosiviwe Mapisa-Nqakula.
Several companies have bid for Projects Biro and Hotel, including Abeking & Rasmussen, which has partnered with DCD Marine. Abeking & Rasmussen is offering its 66 metre monohull OPV design while Paramount Naval Systems has partnered with Navantia for OPVs and with Austal for three IPVs. The IPV offer is based on the Cape Class in service with Australia while the OPV solution is based on Navantia’s Avante class. Southern African Shipyards (SAS) is offering Vard (formerly STX) designs to meet Biro requirements. The other big Biro competitor is Damen Shipyards Cape Town, although Poly Technologies is believed to be interested as well.
The IPV and OPV squadrons will be based at Naval Base Durban, where upgrading and other work is currently underway to accommodate the new hulls and the extra personnel needed to maintain them. Chief of the SA Navy, Vice Admiral Mosiwa Hlongwane, recently said 800 naval personnel will be the full complement when the base is fully operational in about eight years’ time when the new hulls are in service.
Before then Durban will also be home port to the existing three OPVs, converted strikecraft. Docking and essential defects and planned maintenance will be done in Durban eliminating the unnecessary and costly transit to Simon’s Town for these procedures.
According to the 2016/17 defence budget vote, as part of its maritime security strategy, the South African Navy has over the medium-term budgeted R35 million to install ICT systems, refurbish security fences, and create warehouse and maintenance capacity at Naval Base Durban.