Publication: Business Report Issued: Date: 2006-05-23 Reporter: Terry Crawford-Browne

Closing Denel 12 Years Ago Would Have Saved Billions



Business Report

Date 2006-05-23


Terry Crawford-Browne

Web Link


Is Denel's chief executive, Shaun Liebenberg, living in cloud cuckoo land ("Denel unveils plan to put it back on solid ground", Business Report, May 18)?

It was evident during the 1994/95 Cameron Commission Inquiry that Denel was a liability and would never be economically viable.

Instead of closing down Denel 12 years ago, billions of public money have been poured down a drain.

Denel pins its hopes on a R12 billion to R15 billion contract to sell its Rooivalk white elephant to Turkey. First, the Rooivalk is obsolete technology. Second, the US would never permit Turkey to buy Nato-incompatible equipment. Third, Denel already has a chequered reputation in Turkey given the previous Kurdish human rights debacle. And fourth, the Turks would demand at least 100 percent in offsets.

Denel has for years been unsuccessfully seeking foreign equity partners. One reason for the lack of success may be the potentially enormous financial damages against Denel for environmental claims. You report that Denel's reorganisation includes "the possible closure of the munitions plant at Philippi". There is no such plant in Philippi.

The recent bizarre renaming of Swartklip as Philippi is an effort to divert public attention from the disastrous consequences of a "major hazard installation" in the middle of 1 million people. Ex-Swartklip workers report high incidences of cancers. Teachers at neighbouring schools believe their learners are slow because they have been ingesting chemicals all their lives.

The costs of decontaminating Swartklip are estimated up to several billion. The reality is that the distasteful business of killing people for profit makes neither economic nor social sense.

With acknowledgement to Terry Crawford-Browne from Milnerton and Business Report.