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State arms company Denel has jeopardised a contract worth R8 billion by failing to deliver armoured vehicles to the army for more than 10 years, according to City Press
Patria, a Finnish global defence contractor, contracted with Denel in 2013, for the serial production and delivery of 264 Badger armoured vehicles (pictured) to the SA National Defence Force (SANDF).
Denel was awarded the multibillion-rand contract by Armscor for the full-scale production of new-generation 8×8 Badger infantry combat vehicles in 2013.
They are designed to provide soldiers with offensive firepower and protective mobility in combat zones.
The Badger was meant to be fully optimised by Denel to meet the specific needs of the SANDF.
Denel has taken delivery of 37 vehicles from Patria, but has yet to pay for them. The company has also not delivered a single vehicle to the army.
Denel CEO Mike Kgobe denied that the contract was at risk; the company had met with Patria and resolved that they would go ahead with the project.
Armscor CEO Solomzi Mbada told City Press that if Patria’s claim against Denel was successful, it would further disrupt the execution of the contract.
The infantry combat vehicles were expected to replace its 30-year-old armoured Ratel 6×6 infantry battle vehicles.
A source close to the project said that Denel was losing critical skills to a point ‘where there is no more Denel’. The chief financial officer is also being investigated by the Special Investigating Unit for state capture-related issues.
In 2022 Armscor sought to cancel its contract with Denel, but was stopped after it was revealed that R7.4 billion had been spent on the project already.
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