Publication: Business Report
Reporter: Lynda Loxton
Communications Supplier Accuses SA Navy of Trickery
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"
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
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
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
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
The defendants are the department of defence, Armscor and African
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
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.