Navy refit contract price defended

The multimillion-rand contract awarded to the Durban-based Southern African Shipyards (SAS) for the refit and double propulsion engine replacement on the Navy frigate SAS Amatola, was not over-priced. So said Charles Maher, general manager of SAS marketing. The R335-million tender bid that SAS submitted was “of fair value” given the work involved, and it was the most competitive, “hence the award of tender”. He was responding to comments by David Maynier, the DA spokesman on Defence and Military Veterans, who has asked the Auditor-General, Kimi Makwetu, to probe the awarding and operation of the contract to refit the vessel.

Maynier said last month “we have to ensure that the current tender system is bulletproof” that so that there were no issues with the next ship that needed a refit – the SAS Isandlwana. The R335m bill for the refit was likely to escalate as new defects were discovered, he said. He contended that the awarding of the contract raised “serious questions” given the fact that the contract may not have been put out to open tender, and that the cost of the refit may have been inflated by as much as R100m. Maher said the refit and double engine change was progressing well and he did not anticipate the value increasing by more than 5 percent.

He explained that during a refit, the standard planned maintenance was adjusted as detailed surveys of equipment, hull, machinery, propulsion, mechanical and electrical systems were undertaken. ‘’This is due to the opening and inspection of the ship’s systems, which required the vessel to be out of the water (in dry dock), have no fuel aboard, and the switching off of ventilation, water, sewage, emergency pumps, mechanical and electrical systems. “These survey activities are not possible while the ship is in operation with the crew living on board,” he said. He rejected the MP’s belief that the tender might not have been put out to open tender. “The tender was published on page 18 in the Government Gazette No 2779 on 21 June 2013,” Maher pointed out.

The SAS Amatola was the first Valour Class frigate acquired as part of the Strategic Defence Procurement Packages in 1998. The dry docking period was completed ahead of schedule on December 5, and the warship is now back in the SAS’s yard. “The Navy has expressed their satisfaction with the project,” Maher said. The SAS Amatola contract follows the complex propulsion engine change on another frigate, SAS Isandlwana, and the refit of three Warrior Class strike craft now being used as offshore patrol vessels. The contract has created hundreds of jobs, with many local suppliers and sub-contractors being used, boosting the economy of Durban.

“The economy benefited even further with components previously imported now being sourced locally and manufactured in South Africa,”’ Maher said. The refit is expected to be completed in the second quarter of the year.