Denel’s vehicle manufacturing have come to a standstill

An oversight inspection to Denel Vehicle Systems this week revealed a dire picture of the once thriving state-owned company and strategic government partner.

The DA will urgently engage with the Minister of Public Enterprises, Pravin Gordhan, to intervene in the once state-of-the-art combat vehicle manufacturer. The company is reduced to empty factories and have lost a highly competent skilled workforce.

The three prominent divisions – OMC, Gear Ratio and Mechatronics – all of which was responsible for armored vehicles, turret and fire control systems and driveline systems, once boasted with around 1 200 highly skilled staff members. They are currently left with a staff compliment of 200 people being paid at 50% of their salaries. The plants, which manufactured highly sophisticated combat vehicles like RG31’s, RG32’s and RG41’s, are at a standstill. No vehicles are being manufactured due to Denel’s financial woes. The building and plant represents that of a ghost town.

The DA was informed that there were several tenders out, but the process had not been finalized. A contract to manufacture vehicles for the United Arab Emirates have not been started and we found the procurement process has also become so complex that it makes it impossible to ensure that purchases are done in order to continue with business.

Denel Vehicle Systems do not even have the capital to finance tenders and contracts that are in the pipeline. It does not possess of the capital to sustain itself. If a partnership is not brought on board as soon as possible, we anticipate they will not be able to operate beyond May 2021.

The fact that this entity is now also in decline is indicative of the greater decline of Denel SOC Ltd.

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