SA shipbuilding firm nets massive maritime contract


Barcelona – South African shipbuilding firm Damen Shipyards Cape Town (DSCT) has received an order from Armscor for the construction of three Inshore Patrol Vessels estimated at R5bn.

The order marks the conclusion of a deal marred by delays and controversy after Armscor, which acts as the acquisition agency for the Department of Defence, appointed DSCT after a lengthy bidding process. 

The three Inshore Patrol vessels form part of the Navy’s Project Biro which aims to develop South Africa’s maritime security, ensuring that the country has the capability to respond effectively, rapidly and cost-efficiently to maritime threats such as illegal trafficking, fishing and piracy.

DSCT had been the preferred bidder for a project that was hampered by involvement by state-own defence technology company, Denel, which looked for a stake in the project along with a tainted Chinese firm. 

DSCT received the order exactly four years to the day that it received the order to deliver vessels for a previous project for the Navy – Project Canter. 

DSCT chair Sam Montsi said that the company was looking forward to the continuation of its long-standing relationship with the Navy.

“At DSCT we are not only about shipbuilding and repair, but also about providing people with the opportunities needed to reach their potential – whether they work for us or for one of our many local suppliers – and supporting the country’s economy. DSCT is about the development of an entire shipbuilding and related industries,” he said. 

In June last year, Fin24 reported that Denel was gunning for a stake in two of the country’s largest maritime projects, one being Project Biro and the other being Project Hotel, which are collectively worth around R10bn.

The projects were then put on ice, with dodgy Chinese firm, Poly Technologies, also included in the prospective suppliers list for Denel after a memorandum of understanding (MoU), signed was allegedly done on condition that Poly Tech would see a stake in SA naval operations in Simon’s Town and Saldanha Bay and potential involvement in the two colossal maritime projects.

In 2013, Poly Technologies was placed under US sanctions for allegedly selling illegal weapons to Iran, North Korea and Syria and considered hostile to US interests.

Armscor last year confirmed that several companies have entered their bids for Project Hotel and Project Biro, which had been approved by National Treasury for the 2017/18 financial year.

At the time the preferred bidder for Project Hotel was Durban-based Southern African Shipyards (SAS), while DSCT was named preferred bidder for the in- and offshore patrol vessels, but this project has been deferred to the 2018/19 financial year.

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