State-owned Denel is “standing naked in the US courts” after being sued by a US company for non-delivery of jets. Armscor is “struggling”. The SA defence sector is “in tatters”. The SANDF is “rudderless…and in free fall”. Such is the crisis in the Defence Force that Chris Hattingh, the Democratic Alliance spokesperson on Defence and Military veterans, warns: “We are in a very precarious position and we see what's happening in North Mozambique. We see what's happening in the Mozambique Channel…and we are exposed”. Asked how likely it is that South Africa could face that kind of Islamic insurgency somewhere along its borders, Hattingh says: “Well, that's speculation, but remember that once we become defenseless, we become an easy target. There's a saying that there will always be a capable military on our soil, whether it's our own, it's our own choice.” Hattingh also slams the failure of both the President and the Minister of Defence to act on the SANDF-Iran scandal. “…we have this deafening silence from the Commander-in-Chief of the SANDF, the President, on this issue. The President can act, he can act now. It's opportune, but we don't really have a history of the President taking decisions specifically on issues such as that, and certainly not in a hurry.”Sign up for your early morning brew of the BizNews Insider to keep you up to speed with the content that matters. The newsletter will land in your inbox at 5:30am weekdays. Register here.Support South Africa’s bastion of independent journalism, offering balanced insights on investments, business, and the political economy, by joining BizNews Premium. Register here.If you prefer WhatsApp for updates, sign up to the BizNews channel here..Watch here.Listen here.Edited transcript of the interview.Chris Steyn (00:02.0)More shocking details about the state of South Africa's defence sector have emerged as Denel is being sued by an American company. We get the details from Chris Hattingh, the Democratic Alliance spokesperson on Defense and Military veterans. Welcome, Chris.Chris Hattingh DA (00:19.765)Good day.Chris Steyn (00:21.938)Please share the details of this case with us.Chris Hattingh DA (00:25.39)Well, it's very simple, I think, for American courts to consider because that's where the case is right now. What happened is that in 2017, Draken, a company in the United States, entered into a contract with Denel. The core of this contract is that Draken contracted Denel to provide 12 Cheetahs aircraft to Draken the total value of the contract was 35.2 million US dollars and then Denel demanded to be paid 12.7 million which was paid by Draken to Denel and then Denel…should have prepared the Xheetahs get them airworthy and then deliver them to Draken in the United States.Denel only succeeded to deliver three of the Cheetahs with nine still outstanding. Now a lot has changed since then. Denel cannot deliver. The Draken’s appetite for this 1970s technology aircraft has dwindled because the U.S.A programme where they use adversary aircraft to test and train their pilots is not there and they've cancelled the contract with Draken. So we sit in a situation where Draken claims 7.1 million US dollars. That is the refund of advances paid to Denel plus damages.This was filed in the United States on the 19th of August and the summons was issued on the 21st of August and Denel says they will oppose this application of Draken in the United States courts.Chris Steyn (02:37.256)Now is there any point even in suing Danel? Can it make good either way?Chris Hattingh DA (02:43.169)Well, it is one of the many, many failed State-owned companies, but there is still some value within Denel. But I think what is most at stake here is the continuation of the downgrading in the national mindset of Denel as being a company that cannot deliver. Remember that before State Capture actually, or State Capture has actually got their greedy hands on Denel, 2015 it was a top company. It manufactured a lot, it actually fulfilled their contractual obligations to the international arms community and they were...original equipment manufacturer of note in the world. There's still a lot of the technology in Denel left after State Capture and other things, but it has also lost lots of the capability…and the natural property, but many of the people involved in Denel now are actually working in India and in the Middle East.Denel has actually become hollowed out and it is a serious problem. I don't believe that Denel can deliver on this. The US courts will not listen to sob stories about COVID and other stuff. There's a valid contract. Denel didn't deliver and are standing naked in the US courts.Chris Steyn (04:33.01)So I read that two of the jets did not have functioning ejector seats, two of those deliveries. Is that correct, Chris?Chris Hattingh DA (04:41.451)That's what we also appear, but only three were delivered. We've got Denel numbers of those delivered. yeah, the others... This is additional problem for Denel because they spent a lot of money in getting the 12 aircraft ready to deliver. They've succeeded partially in getting three delivered, but the other nine, they've invested a lot of money into the other nine to get them ready.That will also now be forfeited because the cancellation of contract of the USA is on the cards.Chris Steyn (05:18.856)Now, is only State Capture that is to blame for the deterioration of Denel?Chris Hattingh DA (05:25.936)I think it's a combination of two major factors. One is State Capture, which actually hollowed out Denel, but then we also have the problem that's visible all over State-owned companies, that's cadre deployment. With the cadre deployment, a lot of professionalism was lost. We exported our people with high-tech people to all over the world. They cannot function within Denel. So this is one of the problems. The two main problems in my opinion would be then State Capture and cadre deployment. Now with cadre deployment, there are some problems and that is the protection of cadres against accountability and prosecution. And the other major factor in that is that in the cadre stock that's available to be deployed, there's simply not enough professional people with the capabilities required in Denel, specifically in Armscor as well as in other State-owned companies.Chris Steyn (06:39.112)I was just going to ask you about Armscor. Give us an update on the status quo there, please.Chris Hattingh DA (06:44.81)Armscor is struggling just as Denel is struggling. Part of the problem would obviously be the underfunding of the Defence Force, where 68% of the budget goes to salaries, leaving 32% for operations, for equipment, for renewal, for everything. so the SANDF is simply not the buyer that it used to be, and support of Armscor and Denel, that it used to be. This is a big, big problem.Chris Steyn (07:18.854)Where does it leave the South African defense sector?Chris Hattingh DA (07:23.23)Well, in tatters, as we can see, there's almost 200 aircraft. I think on a very good day, 16 of the aircraft may be available. Our submarine fleet is basically gone. I don't think it can be recovered, because if we look in the previous Arm's Deal, which is also very much tainted, where equipment were… was bought for the Air Force and the Navy. That's where the Grippens and the Hawks were bought with, were bought. They are not flying. We also had the submarines and the frigates then also in the Arms Deal. Those, the frigates and the submarines were actually, has actually got a 30-year-lifespan provided that they get a refit after 15 years. That one submarine was …partially refitted and I don't think they dare to take it underwater. Then same situation with frigates. One frigate was partially refitted and the other two not. So they're coming to the end of their lifespan unless there's significant investment into this which would obviously stimulate Denel as well as Armscor.We might as well get rid of the submarines and the frigates. They are getting outdated, they are not being maintained, they are getting behind in technology. And remember, the world has moved on. We're not where we were in 2015. The world has moved, the defense industry has learned a lot from what's happening specifically in Ukraine. And we are not there. We had the research and development capacity in Denel and in Armscor but because of the factors, the underfunding, the State Capture and cadre deployment we have lost most of it.Chris Steyn (09:30.504)Now, what about the risks to South Africa of a defense force in such a non-battle-ready state?Chris Hattingh DA (09:40.649)Well, there's not a lot left of the SANDF. We've got, in my opinion, a leadership vacuum. We've got a minister that doesn't know what's going on. We've got a rapidly aging Defense Force. The outflow of people getting old is not... And the feed of young people into the SANDF is simply not making…a difference in the average age of the SA and Air Force. The SA and Air Force is with an average age of about 47 at this stage with the Reserve Force sitting at 48, approaching 49 average age. Now we don't have the young riflemen, gunners, corporal, sergeants in their 20s. They're simply not there. There's a vacuum there.And this leaves us open. A major factor is that we've got a vast ocean that's our responsibility surrounding South Africa and we've lost our total maritime surveillance and reconnaissance capability. We have a few inshore patrol vehicles they simply cannot reach, cannot go into deeper waters and we are also naked on...on our coastal borders because we cannot do any surveillance, any reconnaissance. They are now trying to get some life back into the 80 years old, what used to be called the Dakotas. They were turboprops, they were grounded about 18 months ago, trying to get them back into the air.Obviously there is no funding. The SANDF remains unfunded and it's not a priority for the government. The government has clearly defined its priorities. It's on the social front and does not see the Defence Force as a priority.Chris Steyn (11:53.874)So does it not realise or does it not believe there are any dangers attached to not having a functioning Defense Force?Chris Hattingh DA (12:01.938)Well, the National Strategic Plan was tabled recently and yes, it actually outlines the threats to South Africa in it. Well, but whether it has any impact on the decision makers, on the President and on Cabinet, I doubt. And what can actually, if we just take one step back. The 1996 White Paper, the 1998 Defense Review, which was followed by a 2015 Defense Review. Now, the 25th, this Defense Review is actually the roadmap for the SANDF. What type of Defence Force do we need? What type of equipment do we need? How do we modernise? Not a single milestone of the 2015 Defence Review, the roadmap for SANDF was implemented. It's basically SANDF is rudderless. I would like to say it's a free fall if we look what's happening. And there was an attempt by the previous Minister of Defence, Thandi Modise, to reassess the 2015 Defence Review. There are all types of excuses coming forward from the current Minister…where deadlines missed for the tabling of this reassessment of the Defence Review. Now they try to obscure it and say they are embarking on a Journey to Greatness. Empty words. There's no budget, no plan to underwrite their Journey to Greatness. We are in a very precarious position and we see what's happening in North Mozambique. We see what's happening in the Mozambique Channel…and we are exposed.Chris Steyn (14:03.368)Meanwhile, the President and the Minister have failed to act on the SANDF Iran's scandal.Chris Hattingh DA (14:12.103)Yes, certainly. The debate about the Iran scandal of the Chief SANDF, we actually said that black and white spelled out the rules for political engagement and spelled out how important it is for defence uniformed personnel not involved in politics, actually went out there and engaged on international foreign policy as if he is absolved from the Constitution obligations from the Defence Act and most important for him as a uniformed member of the Code of Conduct for Soldiers. Then the Chief of Communications…actually did an Op-Ed in what he says is his personal opinion, going further on what the general has said. Obviously taking the gap that the general who needs to enforce this cannot enforce political involvement of any uniformed member anymore after himself being found on the wrong side of that. And this undermines discipline in the SANDF. And what do we have here? After the Presidency, after DIRCO, after the Ministry of Defence distanced themselves from the utterances of General Mopanya in Iran, the Minister comes and says she interviewed him, she listened to his explanations and he did nothing wrong. And still we have this deafening silence from the Commander-in-Chief of the SANDF, the President, on this issue. Nothing is going to come from this from the Minister's side obviously. The President can act, he can act now. It's opportune, but we don't really have a history of the President taking decisions specifically on issues such as that, and certainly not in a hurry. And that's why we've asked now for a debate in Parliament of urgent public importance, and we hope that we can take this to Parliament so that we can get clarity on the pronouncements…Chris Hattingh DA (16:40.87)…without being sanctioned by DIRCO, by the President, on international foreign policy, by the Chief of the SANDF and by the Chief of Communications of the SANDF….who by the way, claim this is his personal opinion. But once you are a uniform member, you lose your ability to have a personal opinion, specifically in those positions. You are a uniformed member of the SANDF, whether you are in your pajamas or in a civil suit. You are a uniformed member by definition. It's the same with what, similar to what we had with a judge who was intoxicated and drove into a fence and then at the end was impeached. He didn't drink in his capacity as a judge. He drank in his own...he drank in his capacity as a judge, not in his private capacity and he was impeached because he was a judge and he was intoxicated and because of all the profanities that he uttered live on camera. There's no personal opinion if you're in that position, a senior member of the SANDF. 24-7 you are a uniformed member of the SANDF, per definition.Chris Steyn (18:06.034)Now you mentioned Mozambique and how naked South Africa is. How likely is it that South Africa could face that kind of Islamic insurgency somewhere along its borders?Chris Hattingh DA (18:47.545)Well, that's speculation, but remember that once we become defenseless, we become an easy target. There's a saying that there will always be a capable military on our soil, whether it's our own, it's our own choice.Chris Steyn (19:09.042)Thank you. That was Chris Hattingh, the Democratic Alliance spokesperson on Defence and Military Veterans speaking to BizNews. I'm Chris Steyn. Thank you, Chris.