Armscor pulls the plug on order for navy’s offshore patrol vessels
State-owned arms procurement agency Armscor has cancelled a long-awaited order for three offshore patrol vessels for the South African Navy.
This comes after Damen Shipyards Cape Town, the South African affiliate of Dutch shipbuilder Damen, won the award for the construction of three inshore patrol vessels. Delivery was expected in about seven years’ time.
The order, along with the cancelled order, formed part of Project Biro.
Armscor also confirmed that in November 2017 — under Project Hotel — it had awarded an order for the construction of a hydrographic survey vessel for the navy to Southern African Shipyards in Durban. Delivery is expected in four years’ time.
The orders under Project Hotel and Biro represent the first major acquisition for the navy since the arms deal of the 1990s. Neither the shipbuilder nor Armscor would disclose the value of the orders, though an industry insider quoted by Defenceweb speculated it could have been as high as R8bn if all the elements in the projects had been awarded.
Other industry insiders say the cancellation of the order for the offshore patrol vessels was probably due to budgetary constraints. The defence allocation in the 2018 budget came to R47.9bn from R48.9bn in 2017. In real terms that is a decline of about 6%.
The orders have been awarded as part of the government’s Operation Phakisa, which has been conceived to stimulate the maritime industry.
Armscor said on Wednesday about 250 direct and 2,000 indirect jobs would be created over five years in local subcontracts under Project Biro.
The vessels would be deployed off the South African coast to protect the country’s maritime resources.
"The project aims to develop SA’s maritime security, ensuring that the country has the capability to respond effectively, rapidly and cost-efficiently to maritime threats such as illegal trafficking and fishing," said Sam Montsi, the chairman of Damen Shipyards Cape Town.
DA shadow defence minister Kobus Marais said his party supported the acquisitions.
"Defending SA’s maritime interests with the equipment the navy has is like plugging holes in a dyke with your fingers."
Defence analyst Helmoed Heitman was critical of the acquisitions. "The three ships being built by Damen are too small to be useful to patrol where they would be needed most, such as in the Mozambique Channel to protect oil tankers and around Marion Island to protect SA’s valuable fish stocks. But for inshore service they are too big; the only true inshore zone is False Bay.
"The larger survey vessel [under Project Hotel] is a strictly luxury acquisition, though it is being built to be adaptable for multiple purposes."