Publication: Business Day Issued: Date: 2001-03-16 Reporter: Vuyo Mvoko Editor:

Denel to Benefit from Arms Deal

Publication  Business Day
Date 2001-03-16
Reporter Vuyo Mvoko
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Saab chose it to manufacture fuselage for Swedish Air Force's Gripen fighters  

CAPE TOWN State-owned aerospace business Denel Aviation and hi-tech company Grintek Electronic Systems are among the first SA entities to benefit from government's controversial R43bn arms deal.  

This announcement, made by Saab CEO Bengt Halse, comes as evidence continues to emerge of government's hand in the selection of subcontractors for the deal, despite state officials' insistence to the contrary. 

In a contract worth $3,6m, Denel has been selected by Swedish manufacturer Saab to manufacture a section of the fuselage for the Swedish Air Force's Gripen advanced fighters. Denel begins the work in May. Saab's joint venture with the UK's BAE Systems produces and markets the Gripen.  

The Denel contract is an element of the $1,5bn industrial participation obligation government linked to its purchase of 28 Gripen swing-role fighters and 24 Hawk lead-in fighter trainers.  

Halse would not be drawn on allegations that government has made decisions about who should be subcontracted.  

He maintained that his company won the contract through "sophisticated and rigorous process" such he had not seen in his 20 years in the arms business.  

The fuselage section of the Gripens which Denel will build houses the main undercarriage and the fuel, electrical and hydraulics systems. It requires advanced precision engineering and manufacturing processes. Halse said that a group of Denel engineers, technicians, pilots and logistical support officers had already been sent to Linköping in Sweden as part of the skills and technology transfer programmes that was agreed upon in terms of the contract with government.  

Between 30 and 40 South Africans will benefit from the programmes.  

In addition, Halse said, a fully equipped state-of-the-art computer-aided manufacturing design centre had been established at Denel's facilities in Kempton Park near Johannesburg. Denel business development executive Grant Sampson said the parastatal would also use the computer facility on other aircraft and components, thereby raising additional revenue.  

Grintek, meanwhile, will supply locally developed communications units for the advanced swing-role Gripen fighter, in a contract worth $4,3m. The units Grintek will supply form the core components of the Gripen pilot's essential communication system. Grintek group MD Sybrand Grobbelaar said Sweden's international export version of the Gripen would also be equipped with the SA-developed system, giving Grintek a chance to be a recognised player in the defence electronics market.  

Halse said: "This clearly demonstrates our ability to meet industrial participation commitments, and proves that the unprecedented industrial participation package negotiated by SA will deliver the economic benefits promised." 

With acknowledgement to Vuyo Mvoko and Business Day.