Please find attached soundbite by Michele Clarke MP.
The DA has submitted parliamentary questions and will write to the Minister of Public Enterprises, Pravin Gordhan, regarding the fact that Denel Pretoria Metal Pressing (PMP) is not tax compliant. Apart from PMP being under such immense financial distress that they are unable to supply State organs with the necessary ammunition, under the Public Finance Management Act (PFMA) State organs cannot purchase from suppliers that is not compliant with tax regulations.
This has far-reaching implications for the South African Police Service (SAPS), the South African National Defence Force (SANDF) and the South African Air Force (SAAF). SAPS has already suffered the consequences when they ran out of rubber bullets and teargas on the first day of the riots that laid large parts of KwaZulu-Natal and Gauteng to waste.
If Denel has any hope of survival, it must recapatilise or sell. Denel Dynamics has already lost most of their skilled staff, and at this point in time has lost the finance and capability to produce missiles – a huge security risk for the country. In order for Denel to honour its commitments, public partnership investments must be brough on board urgently.
Despite the urgency of the situation facing Denel, there has been no intervention from Minister Gordhan or his Department. Not only does this have dire consequences on a national level, but if Denel’s international commitments cannot be fulfilled either it might have more devastating consequences on the already distressed South African economy.
While government must ensure that all Denel orders are realised, it is in the position to amend legislation to ensure that South Africa’s needs are taken care of before exporting to the international market, and must do so now.
While Denel is selling its non-core assets, many questions regarding how this will assist with its recapitalisation and what the strategic financial plan will be going forward, persists. The DA has also submitted parliamentary questions in this regard.
The only way to save Denel is by selling it off to private bidders or putting it under business rescue. A bailout is, however, out of the question. Government must find a better solution to deal with SOEs that continue to drain the tax base.