British Aerospace is offering to consolidate the South African defence industry alongside the emerging single European defence company, as part of its bid to sell Saab/BAe JAS39 Gripen fighters and BAe Hawk lead-in fighter trainers to the South African Air Force (SAAF).
Sources in the South African defence industry believe this could include the purchase of a minority stake in the aircraft and missile businesses of Denel, the state-owned defence group in the early stages of privatisation. A Whitehall source said last week this is being actively encouraged by the UK.
BAe neither confirms nor denies whether the purchase of an equity stake is included in the offer, but says the company is pursuing partnerships worldwide to ensure the consolidating European defence industry has sufficient weight to compete against US contractors. This could take the form of working together project by project, or by taking an equity stake.
BAe has partnered with two private aerospace firms in South Africa. It has placed orders with AMS, worth £10 million ($16.3 million) for the supply of engine and airframe life monitoring systems for the Hawk, and taken a minority stake in ATE, a systems integration house, marketing its Vulture unmanned air vehicle.
A government decision on the winning fighter bids, which form part of a broader £3 billion modernisation programme of the South African National Defence Force, is expected shortly. The leading contenders are the Gripen and the Dassault Mirage 2000.
The BAe/Saab offer is thought to be favoured by the SAAF, which shortlisted the Gripen on technical grounds, and the Department of Trade and Industry, believed to have received favourably the BAe/ Saab industrial participation offer.
The selection criteria place a two-thirds weighting on industrial participation and BAe has astutely funded projects that include a training centre for former members of Umkhonto we Sizwe, the African National Congress' now-disbanded guerrilla army.
Source: Flight International