3 January 2007: Business Day
SA ties up missile deal with Brazil for Denel, Armscor
A government-to-government agreement between SA and Brazil has been signed
for a joint venture between Armscor, Denel and the Brazilian air force for
the development of missiles.
The Brazilians have committed $52m to the project, which will be led by
Denel in collaboration with its Brazilian counterparts, Denel spokesman Sam
Basch said at the weekend.
In total, the project has been estimated to be worth about R300m. In terms
of the agreement, Denel will develop its A-Darter short-range air-to-air
missile from a prototype to an operational system.
Denel has already invested considerable sums in developing the missile
prototype but has been constrained by a lack of funding to take it to the
next stage.
Basch said the agreement, signed a week ago, was a further step in
intensifying missile co-operation between Denel and the Brazilians, who
opted for Denel as its partner because of Denel`s proven capability in the
missile field.
Basch said Denel hoped that other projects would flow from the missile
agreement. He said Brazil, for example, would in future require attack
helicopters and could be interested in Denel`s Rooivalk.
Meanwhile, the finalisation of the Turkish government tender for attack
helicopters has been postponed for the third time - this time until next
month.
Denel is competing against the deal`s other preferred bidder, Agusta
Aerospace of Italy, for the estimated $2bn tender. Basch said no reasons
were given by the Turkish government for the delay in reaching a decision,
though he added that Turkey was known for taking a long time to finalise
such matters.
Two rival bids, from French Eurocopter Tiger and Russian Kamov KA50-2, were
eliminated in the tender.
Basch stressed that the delay had no financial or other implications for
Denel as the contract had not been built into its budget or its
restructuring programme, which is aimed at turning the loss-making arms
manufacturer around to profit.
Winning the Turkish contract will ensure the survival of the Rooivalk,
which
has been sold only to the South African Air Force, which bought 12
helicopters in 1999. Since then Denel has not been successful in finding
other buyers for the Rooivalk.
Denel made a fifth successive loss in sits financial year to end March.
