Britain is once again eyeing South Africa as a market for some major defence machinery, reports Stefaans Brmmer
SHOULD Cabinet decide to buy four second- hand submarines from Britain – at the bargain price of R2-billion – it may well find the deal to be a sweetener. London is hoping the cheap subs will soften South Africa for a much larger basket of arms orders bearing the “made in Britain” stamp.
Top on Britain’s wish list is an attempt to revive Yarrow shipyard’s bid to build the South African Navy four corvette patrol craft, a scaled-down version of the frigate warship. Yarrow was shortlisted alongside Spain’s Bazan shipyard in late 1994 to supply the corvettes, but Defence Minister Joe Modise put the procurement on hold after an outcry over the cost.
Bazan’s cheaper bid would have amounted to about R1,7-billion (at present exchange rates more than R2,2-billion) for the hulls alone. The British offer was 30 to 40% more expensive and had a less enticing counter- trade component. Now indications are that the tender process will be reopened and that the British government is hoping to use the cheap submarines as a bargaining chip on behalf of Yarrow.
Eyed equally eagerly by the British is what promises to be post-apartheid South Africa’s largest defence procurement contract by far. The South African Air Force (SAAF) wants to replace its ageing Impala jet trainers, and the front-runner in the unofficial bidding appears to be the British Hawk, described in British military literature as “an excellent trainer, but also a credible offensive support aircraft”.
The price tag for more than 40 Hawks, the number the SAAF is interested in, could well exceed R4-billion. Counting in favour of the Hawks is that Zimbabwe and Kenya, two key allies should South Africa venture into joint African operations, already use Hawks.
Parliament’s defence committee was briefed this week by the navy on its most pressing equipment needs. Both the submarines and the corvettes appear on the list. Committee chair Tony Yengeni said his committee would meet again later this month to decide whether to recommend the submarine purchase, but would not give more details.
But a defence analyst close to committee members said there appeared to be support from African National Congress, Inkatha Freedom Party and National Party members of Parliament for the submarine deal, and also for the corvettes to be put back on the navy’s shopping list.
Should the committee give the go-ahead, it would free Armscor, as the state arms procurement agency, and the navy to enter detailed negotiations. Once these are complete, Cabinet would still have to give final approval.
Defence experts were unanimous this week that the four British diesel-electric Upholder submarines are excellent value for money – the price tag of 300-million (just over R2-billion) for all four is a third what it cost the Royal Navy to have them developed and built – but that South Africa’s need for them as well as its ability to pay were not as clear. The amount will be payable over 10 years.
Peter Bachelor, co-ordinator of the Centre for Conflict Resolution’s arms watch programme, said: “If Parliament and Cabinet decide yes, then it will be a good deal. [But] the question we need to be asking ourselves, quite apart from affordability … is do we really need the submarines? I would say it is much more important to invest in maritime patrol aircraft, and how to co-ordinate a coastal patrol.”
Bachelor said he had indications the British had made no formal link between the Upholder offer and the corvettes – something they had come to regret – but that it still appeared to be a sweetener for the corvette and Hawk contracts.
Built in the late 1980s and early 1990s, the Upholders were decommissioned soon after because of British defence cuts and a decision to channel available resources to nuclear submarines.
Captain Richard Sharpe, editor of Jane’s Fighting Ships said: “The British government has been trying to get rid of them for three years. Canada was the preferred choice, but Canada is heading towards disarmament by a series of defence budget cuts. [The Upholders] are an embarrassment to the British government, so no doubt whoever gets them will get them at a bargain price.”
He said it “would make sense” if the British government was trying to use the cheap price tag as a sweetener for other deals like the corvettes. But he said there was “nothing strange” about that. “Offset is now accepted internationally as a way to acquire defence procurement contracts.”
Brigadier Bill Sass of the Institute for Defence Policy said the Upholder offer was “a good price for a good product”, but that there were probably strings attached – specifically in relation to the corvette and Hawk deals. “The exact deal is never made public … The small print only the governments will know.”
He said contracts of this nature included the supply of parts and personnel training, as well as negotiations over payment schedules and currency exchange rates. Once South Africa decided on buying the submarines, it may be tempted by the logic of equipment standardisation and more favourable package deals to favour Yarrow’s corvette bid and other British supply contracts.
But a senior member of South Africa’s military procurement establishment said: “I don’t think Parliament will give money for both the corvettes and the submarines. My feeling is if we can get both, excellent. But go to the populace and say there will be no houses and no schools, what do think they’ll do? They’ll laugh at us … It is an excellent deal, but something is only excellent if you want it.”
He said the corvettes, which had been on the navy’s shopping list for about a decade already, were a much more urgent priority. The navy could still extend the lifespan of its three French-built Daphne class submarines until 2005 – which had been the intention before Britain made the Upholder offer.
He said while he did not believe the Upholders were a sweetener for the corvette deal – the British know they cannot compete with the Spanish, for example – it was rather an attempt to sell submarines instead of corvettes. This would ensure that the South African navy is brought closer to the British standard, which could have future spin-offs in defence co-operation and procurement.
Defence consultant Helmoed Rmer Heitman, who is also South African correspondent for Jane’s Defence Weekly, pointed out that another factor behind the Upholder “sweetener” may be Britain’s desire for open access to Simonstown and Durban naval bases. He said Chile was still interested in the Upholders – and appeared to have made an offer that exceeded the price at which they were offered to South Africa – but the British had less to win from them by way of offset benefit.