Why is the South African Air Force sidelining Denel over the R1 billion C130 fleet upgrade contract?

16 August 2023

The DA is calling on the South African Airforce (SAF), Department of Defence and the Department of Public Enterprises to immediately pause the R1 billion contract for the upgrade of six Hercules C130 military transport aircraft until clarity is provided on why Denel Aeronautics has been sidelined in favour of a UK contractor.

Denel has been struggling to remain a going concern and has had to rely on bailouts from the South African taxpayers. The question that arises is why the SAF is refusing to give business to Denel for the essential strategic upgrades of its fleet? Is the SAF not aware that externalising defence contracts will damage our economy, kill the local defence industry, and lead to the loss of jobs?

Reports are that the SAF plans to spend R1 billion upgrading its six Hercules C130BZ fleet and will utilise the services of a UK contractor, Marshall Aerospace, to do the upgrades. Industry players are of the view that Denel Aeronautics could do the job at a much cheaper price than what is being quoted by Marshall Aerospace.

The decision to go with a UK defence contractor is puzzling because in the late 1990s, Denel was able to upgrade six C-130B's to C-130BZ's. As such, the claim that Denel does not have enough capabilities and facilities for the current job on the C130s is hard to believe.

Any claim that Marshall Aerospace is the Original Equipment Manufacturer (OEM) for the Hercules C130 BZ fleet navigation system will not hold water because, previously Marshalls Aerospace partnered with Denel to design the current system. Besides, Denel does have Lockheed Martin OEM accreditation, which it has previously put to good use, maintaining the workhorse fleet

If the Departments of Defence and Public Enterprises including Armscor will not use their budget for defence contracts in South Africa, Denel will find it hard to break even and survive from its own initiatives. The priority should be to save the local defence industry first before external defence contractors are considered.

Issued by Ghaleb Cachalia, DA Shadow Minister of Public Enterprises, 16 August 2023