Defence industry CEO calls for PPPs to fund SANDF projects

South African Aerospace, Maritime and Defence Industries Association CEO Sandile Ndlovu has called for the use of public-private partnerships (PPPs) to help fund defence projects in South Africa.

Speaking at the African Aerospace and Defence trade show and exhibition, held at Air Force Base Waterkloof, in Centurion, on September 19, Ndlovu questioned why the South African National Defence Force (SANDF) had not yet considered PPPs to address its financial and equipment challenges.

“Our SANDF, particularly the three main arms of services, is struggling with equipment. The main reason is the historical reduction of its budget to a point where there is currently no special defence account,” he said.

Ndlovu pointed to the success of PPPs in other sectors of government, suggesting similar arrangements could benefit the defence sector.

“You see PPPs in other areas – in the road sector, in infrastructure, even in the health sector. The Correctional Services has PPPs, with some of our prisons operated by civilians,” he noted.

Ndlovu stated that following discussions with the SANDF, progress was being made towards implementing PPPs in the defence sector.

“We’ve engaged, and I’m happy to say, finally, we are now at a point where we are looking for mechanisms on how to look to implement that. And the main reason we’ve been having that discussion was precisely because of the fact that there are these challenges that we are talking about,” he said.

Ndlovu also raised concerns about the disconnect between the SANDF’s struggles and the capability of South Africa’s private defence industry.

“To an outside observer, it makes no sense why the SANDF faces these challenges when there is a South African defence industry,” Ndlovu commented, emphasising the negative perception that arose when incidents, such as an armoured vehicle being ambushed in the Democratic Republic of Congo, reflected poorly on both the SANDF and the defence industry.

He pointed out that, aside from State-owned entity Denel, 99% of South Africa’s defence industry is privately owned, and emphasised the need for fair compensation for private businesses.

“These are companies first and foremost, so there has to be a way in which they are reimbursed or compensated for the work that they perform. That's where we've been missing each other,” Ndlovu said.

By allowing private funding into the defence sector, Ndlovu believes companies can present solutions for projects such as restarting the Rooivalk attack helicopter programme.

“By allowing private funding to come into this space in a controlled way, companies can present solutions with funding. The State can then issue out long-term contracts, such as the kind it would issue out in a PPP environment. We are nearly there. That's another reason why we are speaking to National Treasury,” he said.

Ongoing discussions with National Treasury, Ndlovu added, aim to revise procurement regulations to make PPPs viable within the defence sector.

“We’ve asked them to come over so that we can present that scenario to them and see if they can allow procurement regulations to make that a reality, because it’s a problem that has been plaguing us for a very long time,” he said.

While acknowledging the SANDF’s dire financial situation, Ndlovu emphasised ongoing efforts to bridge the gap between the private industry and the military.

“We are working on it, but we have to be cognisant of the reality that industry is private. They will not be able to do this for free. The SANDF doesn’t have money. It’s not that they don’t want these things fixed. So how do you bridge the two? How do you bring the two together? We've been doing this for the past 18 months. I think we have finally gotten to a point where, right up to the top, we have support. If you would have listened to the budget vote, where a consistent theme was PPPs,” Ndlovu said.