Defence and Military Veterans Minister Angie Motshekga needs to put effort into the newest addition to her portfolio – State-owned defence and technology conglomerate Denel.
This is one upshot of last week’s Joint Standing Committee on Defence (JSCD) meeting where Denel Group Chief Executive Tshepo Monaheng updated its turnaround plans.
A post-meeting Parliamentary Communication Services statement, signed off by joint JSCD chairs Malusi Gigaba and Phiroane Phala, urges her to “strengthen engagements to find workable solutions around the challenge facing Denel of acquiring guarantees necessary to deliver on contracts required to improve the liquidity challenges facing the entity”.
The statement has Phala saying: ““While the committee acknowledged the challenge with the unwillingness of the financial institutions to issue guarantees, mainly due to administrative and governance challenges, it is necessary to find solutions as a means of breathing new life into the entity”.
The need for solutions aside, the “over-riding issue is stabilisation, re-establishing [Denel’s reputation in the global defence market and improving liquidity”.
Further the JSCD sees Denel as “important” to support the SA National Defence Force (SANDF) in delivering on its mandate and skills development as well as the impact the defence and technology group can have on economic growth.
On the oft-mentioned skills drain, the statement has Gigaba saying these “challenges” have to be addressed to ensure there are “adequate skills to deliver on any probable contracts”.
“Denel has to be supported to exploit the huge potential inherent,” is another quote attributed to Gigaba.
Motshekga’s assurance that processes are “in place” to appoint a new board was welcomed by the JSCD as was “improvement in the alignment between Armscor and Denel, especially on finalisation of Project Hoefyster [the long-running replacement for the SA Army’s multi-use fleet of Ratel infantry fighting vehicles]”.
Positives aside, the JSCD pointed to continued under-funding of the SANDF as a long term risk to the national defence force. Since its establishment mid-last year in the seventh South African administration since democracy, the JSCD has highlighted the need to reconsider the SANDF’s “dwindling budgets” as these have “an immitigable impact on the defence industry”. Additionally, the funding shortfall affects SANDF ability to acquire and maintain the necessary capabilities to safeguard South Africa’s sovereign integrity”.
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