Publication: Business Report Date: 2005-07-10 Reporter: Lynda Loxton Reporter:

Communications Supplier Accuses SA Navy of Trickery



Business Report




Lynda Loxton

Web Link


Cape Town - Richard Young, the chief executive of C2I2, has become better known in recent years for legal challenges against South Africa's arms contracts, but he has also made substantial inroads supplying data communications systems to the US department of defence.

In the process, however, he has spread the word both locally and abroad that there is something dodgy about the South African arms industry.

In a 2003 statement, C2I2 said the US navy's decision to award it a contract to supply electronic components for its advanced Nimitz-class aircraft carriers and warships "is certain to help our claims presently being made in court that we failed to win South African navy contracts due to skulduggery".

The products in question were high-performance fibreoptic data communications hardware and software that formed the networking backbone of the US navy's ship self-defence system, which is now standard for all non-Aegis-class surface combatants.

Exactly the same technology was specified by Armscor and the navy for all future navy vessels.

Young said this week that there had been nothing easy about getting the US contracts, but at least the US defence industry was not corrupt and that contracts were awarded based purely on the merits of the product.

The US contracts have so far been worth about $6 million (R41.4 million), but this was expected to grow as the refitting of the carriers and production of various new classes of surface combat vessels gathered steam.

The first of these contracts was awarded shortly after the South African navy suddenly decided to drop business with C2I2 and announced that it would buy a system produced by French contacts of Schabir Shaik - former deputy president Jacob Zuma's financial adviser who was recently found guilty of fraud and corruption involving the arms deal.

Zuma has since been sacked by President Thabo Mbeki and faces corruption charges.

Schabir is the brother of South Africa's former chief of defence procurement, Shamin "Chippy" Shaik.

Although pleased with the US deals, Young decided he could not let "skulduggery" at home to go unchallenged.

He said it had been alleged that he had been dropped because his systems were untested in major military and naval hardware, but he had previously been awarded a contract to supply almost identical equipment by General Dynamics of Woodbridge, Virginia, for the US marines latest $10 billion Expeditionary Fighting Vehicle.

C2I2 had also been contracted by STN Atlas to adapt software for the ISUS 90 combat management system for the South African navy's new U-209 submarine being built by HDW of Kiel, Germany.

This would have involved the adaptation of system software to allow for integration of weapons and combat-suite equipment selected specifically by the navy, as well as the relevant human-machine interface software implementing the navy's fighting doctrine.

Other South African companies involved in the integrated submarine combat system had been Tellumat Defence, which was selected for the production and testing of console electronic cabinets and printed wiring assemblies and DefenceTech, a division of the CSIR, whose workshare involved the supply of sonar hydrophones and transducers.

Public hearings by the public protector into the dispute in 2001 confirmed that Young's products were rejected in favour of systems produced by a company owned by Schabir Shaik.

Young has since launched a R149 million damages suit as a result of the award of the information management system (IMS) contract to Thomson-CSF Detexis of France and for the systems management software (SMS) to African Defence Systems, "both being in respect of systems to be fitted to the four corvettes built and supplied to the South African navy".

The defendants are the department of defence, Armscor and African Defence Systems.

Young said that although the IMS fully conformed with both the US navy's Safenet specifications and the South African navy's functional and physical specifications, it was "almost entirely constructed from commercial-off-the-shelf components, these being ruggedised, optimised and integrated into a coherent functional system". These components eliminated potentially vast development costs and made maintenance and replacement easier.

His string of court actions has left Young with is a strong faith in the independence of the judiciary - he just hopes that it will be able to keep it intact given growing political pressure on it.

"Apart from some rather long delays in getting judgment, almost without exception we have been impressed and satisfied with the capabilities and findings of the presiding officers. At present the judiciary is working - apart possibly from some self-induced tweaking, it should not be meddled with," Young said.

With acknowledgements to Lynda Loxton and Business Report.

Another late Christmas present.

It's getting like shooting fish in a barrel - or is it scooping fish out of a barrel.

Correction of Fact

My accusations of skulduggery and/or trickery are actually against the South African Department of Defence (DoD), served by the likes of Shamin "Chippy" Shaikh, as well as a handful of SA Navy officers on secondment.

The headline of the article was something into which I had no insight nor control.