Parliament’s Portfolio Committee on Public Enterprises has reiterated its call for state arms manufacturer, Denel, to diversify.
The remark follows a statement by the company, saying it will not be able to pay full salaries for one of its divisions next week.
Denel says it’s decided to pay workers earning over a million rand, only 40% of their salary. Those earning above R250 000 will receive 50%.
Denel says the measure will affect only one division and workers from the other five will receive their full pay.
“As a committee we have been insisting that Denel should diversify and move towards using their capacities to start manufacturing other products that can be useful for our own internal use. For example, they can produce ambulances; they have capacity to build cars like inyalas; they can produce vehicles for police and so forth. And therefore we have been insisting that here must be a mechanism to move towards that diversifying from Denel,” says the Chairperson of Parliament’s Portfolio Committee on Public Enterprises.
The company recorded a R1.7 billion loss in the 2017/18 year and is currently facing a liquidity crisis.
Last year, the arms manufacturer received over R3 billion bailout from the government.
“Denel staff have been struggling since 2020 July to receive salaries with some employees even committing suicide. The current arrangement at Denel Aeronautics is in the right direction as far as staff is concerned. What can be privatised? What partners can be brought on board and what can be salvaged and then address the hemorrhaging of key skills in competitors and the loss of standing in the world markets. I’m afraid this is yet another sorry saga in the long line of SOEs and DPE must take full responsibility,” says DA MP, Ghaleb Cachalia.
The committee blames the financial position of Denel on corruption, state capture and a decline in domestic and international demand.
