Denel SOC Ltd

[laughs] It's, it's, um, because you set yourself an unrealistic target, whereas your target must be based on the economic assumptions at the time.

Minister, the government has provided guarantees to the SAA and Denel, 1 billion rand to the SAA and 660 million plus $14 million to Denel.

What are those guarantees all about? Because I think whenever South Africans hear state-owned enterprises and the words bailouts and guarantees, it is concerning.

Can you put that in perspective?

The Denel one, to help them, there are two contracts they've acquired.

One to supply Oman, the other one is to supply Algeria

AlgeriaIn order for them to raise capital to fund those contracts, they needed that guarantee.

We should be learning from all those lessons.

I mean, look at Denel.

Look at Denel.

Yeah.

I mean, like-

Yeah.

Our Roy Falke was developed into the Apache and look what they've done with the Apache.

Now look, the other thing as well is that with, you know, I've, I've made many policy submissions in Parliament and even spoke to the relevant ministers persistently about Denel to say, "Why can't we give Denel a civilian function?" Because if they had capacity to could manufacture armored vehicles and, and helicopters, a highly sophisticated system-

Mm-hmm

... certainly an, a request to return for a return to competence and a return to elevating the smartest people in our society to the best positions, um, so that we can have companies like Denel, who manufacture weapons, for example, that are bought by everyone in the world.

Um, you know, the, the, so that we can have those kinds of people running, uh, all of our companies and, and, uh, certainly if we were lucky enough to have them running our government.

Um, and I think-

We get a sense of that performance with the Group Chief Executive Officer, Reece Somerton.

We also speak to independent defense and military expert, Cobus Marais, on Denel's 30 billion rand pipeline that they hope to realize as the business continues to report a operating and profit, uh, an operating loss for the financial year-end.

We take a look at their ambitions and see if those ambitions are realistic.

We also have a conversation with independent energy expert, Tshepo Khadima, around the e- electricity tariff increases that Eskom has been looking to propose under the new procur- uh, procurement pricing policy, and look at that compared to the grid transfer objectives that we have.

[upbeat music]

You are listening to Jimmy Moyaha on SAFM.

SAFM.Denel, the South African aerospace and military technology state-owned entity, believes that it can turn its fortunes around if it can tap into its 30 billion rand pipeline.

As it stands, the business reported a little over 1.4 billion rands of revenue in the previous financial year, and still despite that revenue, reported a 360 million rand loss for the financial year.

Uh, we built 38 JTACs.

Denel built 38 JTACs.

We had a huge squadron.

It was good enough for Africa, it was good enough for everything.

She has spent years in prison under the old regime.

After liberation, she serves as Minister of Public Enterprises, the cabinet portfolio that oversees South Africa's most valuable state-owned companies such as Transnet, Eskom, Denel, South African Airways.

These are the crown jewels.

Between them, the control procurement budgets worth tens of billions of rands every year.

This pattern is replicated across every state-owned entity the Guptas target.

At ESCOM, the board appointed in December 2014 under Minister Lyne Brown is also thoroughly aligned with GOPTA interests that it becomes known as the GOPTA Board.

At Denel, the state defense company, a similar capture occurs.

At SAA, Zuma's close ally Dudu Mieni is installed as board chair and runs the airline into the ground and anyone who resists is removed.

There is a lot that can be fixed.

You mentioned Denel earlier, the exhibition that I was fortunate enough to attend yesterday.

earlier this year, talking to people who have to work with this equipment, representatives of the South African National Defence Force.

They are very good people.

And then, as we saw at the exhibition, there are very good South African companies already doing this kind of work, this kind of manufacturing work.

but the states and the SNDF are not buying from them.

So working on those kinds of robust public-private partnerships to bring in more competition for companies like Denel, but also then you relieve some of the fiscal burden for the states.

So then even if you can't up your defending, your defending your spending as a percentage of GDP on defense, you then rely on value for money, private sector solutions and private sector companies And you've got, potentially, you have, I don't know if you call them sunset clauses or what you might refer to them as, but it doesn't mean to say that you bring in private sector companies at this point in time that it's a guarantee that they'll have the contract for the next 100 years.