Denel critical for SANDF to meet mandate, needs funding to restructure, MPs told

Denel is in dire financial straits and has been unable to pay full salaries, triggering an exodus of skilled staff members and litigation aimed at liquidating the state company.

FILE: A Denel stand at an arms convention. Picture: @denelsoc/Facebook

CAPE TOWN - Embattled state arms-maker Denel will require funding in order to restructure and save a business that is critical to the SA National Defence Force meeting its mandate, the Department of Public Enterprises has told Parliament.

Denel is in dire financial straits and has been unable to pay full salaries, triggering an exodus of skilled staff members and litigation aimed at liquidating the state company.

The department gave Parliament’s Public Enterprise portfolio committee an update on the state of the SOEs that fall under it on Wednesday.

Public Enterprises’ Director-General Kgathatso Tlhakudi said that the leaner, meaner operating model for Denel would need money in order to be implemented, and that his department had applied to Treasury for funding to do this.

But Tlhakudi also raised the question of how government could better support the state-owned defence company.

"We also need to look at how, for the rest of government, the business Denel can be supported. Where it comes to munitions, for instance, are all our security services purchasing from Denel? The answer is no. So what kind of products are being brought into the country, that could be supplied by Denel – we need to have a look at that.”

Tlhakudi said that from engagements with the Department of Defence, it was clear that Denel remained critical to the defence force's capabilities.

Download the Eyewitness News app to your iOS or Android device.