Question NW834 to the Minister of Public Enterprises

Reply:

According to the information received from Denel

Significant progress has been made as follows:

1. In 2022, Denel made a submission to Armscor for the restart and continuation of Project Hoefyster, following a five-year interruption caused by technical compliance disagreements with Armscor regarding the lead variant in the development programme.

2. On 4 April 2023, the Project Control Board (PCB) resolved that the bulk of the technical issues could be waived, or were non-contractual, and that the Development phase (Phase 1) of the Project could continue, but 15 non-compliances were referred back to Denel for resolution. It was further agreed that the production (Phase 2) of the 1st Battalion could be initiated with appropriate Department of defence and Military Veterans approvals and contractual changes in place.

3. Since the PCB in April 2023, Denel Landward has restarted the phase one focusing on clearing the remaining non-compliances against the lead variant and submitted two Contract Variation Orders (CVOs) to Armscor. The first, Phase one CVO, aims to realign the remainder of the project considering the order, schedule, and commercial realities that have impacted the programme.

The second, Phase two CVO, issued for review by Armscor, focuses on industrialisation and production adjustments following the PCB's recommendations.

4. Regular Armscor and Denel integrated programme meetings have been held since the last quarter of 2023/24 financial year to improve alignment. These monthly meetings aim to facilitate direct communication and coordination among all stakeholders.

5. A programme management steering committee, comprising executive from the Directorate of Army Acquisition (DAA), Armscor, and Denel, oversees the project. This committee convenes quarterly to monitor progress and make strategic decisions, with its initial meeting on 4 March 2024 followed by a review meeting planned for mid-April.

6. Of the 15 non-compliances referred to Denel since May 2023, nine have been resolved by Denel and are awaiting formal reviews by Integrated Programme team. The five remaining issues are being resolved / reviewed by the project team and will be cleared shortly.

These steps, as supported by DAA and Armscor, underscore Denel Landward’s commitment to advancing Project Hoefyster, demonstrating a concerted effort to navigate past challenges and ensure the project's successful continuation and completion.

 

Remarks: Approved / Not Approved/ Comments

Jacky Molisane P J Gordhan, MP

Acting Director-General Minister

Date: Date