SANDF & Armscor on initiatives to improve the availability of spares for prime-mission equipment; Armscor projects; Chief Reserves on activities, challenges and way ahead; with Deputy Minister

Defence

02 March 2023
Chairperson: V Xaba (ANC)
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Meeting Summary

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The Joint Standing Committee on Defence was joined by the South African National Defence Force (SANF) and Armscor, the Department of Defence, the Chief Reserves Division, and Deputy Minister of Defence Thabang Makwetla. Armscor highlighted funding and the lack of proactive procurement as the issue facing the entitys ability to procure spares, providing initiatives to solve the spares issue. Armscor also presented its initiatives to solve its spares issues which included procuring spares proactively rather than reactively and collaborating with Denel in this process.

The Chief Reserves Division made the case for reserve force and presented the challenges faced by the South African National Defence Force. The Chief Reserves Division stated that the strength of the reserve force had weakened and there was an urgent need to rejuvenate the reserve force. The defence force was determined to confirm the strategic purpose of reserves and reprioritise the roles of the reserve force, re-enforce the business case of the reserves, address the ageing force and gender imbalance linked to the lack of a new intake, as well as to rejuvenate the reserve force.

Members raised concerns over the lack of proactive maintenance in the defence force. Members asked Armscor to regularly report to the Committee so that the Committee could have better oversight on maintenance issues so that the Committee could better intervene in the situation and help the defence force defend the country. In their responses, Armscor further explained their troubles regarding concluding maintenance problems and providing quality parts to the Committee and felt that National Treasury needed to be approached for a broader discussion. Members were concerned about the SANDFs reliance on the reserve force and the bleak picture of the future that the presentation painted. Members found that there was a need for a real review of the structure of the defence force and the structure of the budget. The SANDF explained to the Committee that there was no budget to recruit reserves even if the regiment had young people who could rejuvenate the reserves. The SANDF agreed with the Committee that there was a need for the budget to be restructured.

Meeting report

The Chairperson welcomed the Committee and everyone present at the meeting. He outlined the agenda for the day and noted that there were no apologies.

Deputy Minister of Defence and Military Veterans,Thabang Makwetla, thanked the Committee for the meeting. He stated that the agenda items for the day's meeting were related and important. Armscor and the Department of Defence had ongoing projects, and more projects would begin and be funded this year. It was important for the Committee to know the latest developments on the challenges the reserves faced, primarily caused by the ad hoc management of reserve systems. The Committee would see this information as the briefing was presented.

Ms Thobekile Gamede, Acting Secretary for Defence, greeted the Committee and outlined the order of the presentations.

The briefing by the SANDF and Armscor focused on initiatives to improve the availability of spares for prime-mission equipment.

Adv Solomzi Mbada, Group Chief Executive Officer of Armscor, stated that the core of the presentation was that longer-term arrangements with various suppliers and proactive planning make the procurement of spares seamless. Armscor has umbrella agreements with other entities involved in spares procurement and needs to ensure that it continues with that approach and carries on with a consistent approach.

The presenter from Armscor stated that Armscor currently procured spares for various Prime Mission Equipment (PME) in reaction to requirements and requests from the South African National Defence Force (SANDF). Therefore, Armscor was purely reactive. Funding and the phasing of funding were underlying and overarching issues for Armscor.

Armscor faced several challenges regarding spares procurement, including:

• Some spares had long lead times. If requirements were received late in the year and operating budget funds were only available in the specific financial year, those spares that would not be delivered within the financial year could not be procured.

• The majority of the SANDF PME was old and suffering from increasing obsolescence.

• Some spares had to be specifically manufactured or alternatives had to be identified and qualified. This was time-consuming.

• Denel was the original equipment manager (OEM) of a significant portion of the SANDF PME. Sourcing spares through Denel and re-engineering obsolete spares was time-consuming.

• Due to certification requirements, aircraft spares had to be procured either from the OEM or from accredited suppliers, if they existed. South Africa did not share in spares pools with the OEM, as a number of other countries did due to cost. Spares were only supplied once a slot for manufacturing thereof came up. Approximately four years ago, as part of the maintenance contracts that Armscor concluded with other OEMs, South Africa participated in spares pools which were contributed by the respective users of those product systems. The OEM would then keep a spares pool available. Anything that the aircraft users needed would be provided to them from the spares pool. They would not have to wait until those things were manufactured. Armscor significantly cut down on the costs of maintenance contracts with the OEMs. Many things were taken out of the maintenance contracts, one of them being South Africas contribution to the spares pools. South Africa did not contribute to the spares pools any longer. This resulted in significant delays and aircraft being grounded.

The initiatives to improve spares procurement were discussed in the meeting and included the following:

• Proactively procuring spares rather than reactively. Currently, only the SANDF can contract for spares, so the requirement for spares needs to be provided early in the year.

• Contracting the procurement of spares to other entities with the required engineering and financial abilities. Due to the increasing obsolescence of the product systems, many spares need to be re-engineered and qualified. To address this, Armscor is working with Denel to make data packs available to other entities with the engineering and financial capacity to procure spares from various suppliers.

• Negotiating umbrella agreements with OEMs and obtaining approval from Armscors board of directors to facilitate quicker turnaround times for spares procurement.

Proactively identifying spares requirements is key to ensuring timely availability of critical spares. The Defence Decision Support Institute (DDSI) of Armscor has previously performed analyses of maintenance requirements for selected SANDF PME. The DDSI can analyse product system usage, failure rates, and obsolescence of sub-systems to identify high usage items for proactive procurement of sufficient quantities.

See attached for full presentation

Discussion
Mr S Marais (DA) welcomed the presentation. He stated that Armscors approach seemed reactive. Armscor had been involved as the acquisition agent for any contracts of material nature. He asked why there were initiatives and proposals at this stage where we should have a problem statement and how the problem had been resolved. He mentioned that coming up with a reactive proposal did not help much considering the fact that these resolutions took long to implement. He questioned why this had never been properly addressed and resolved. There were reports last year on multiyear capital acquisition and contracts. The Committee was told that the order book could be as high as up to R10 billion. It seemed that the Committee did not have any medium-term planning regarding spares, maintenance, and acquisitions, knowing very well that capabilities had gone down the drain. He asked why the Department of Defences material acquisition handled this order book project differently compared to other order book projects. We saw and sat with these problems, and they were an embarrassment and concern to all of us. Armscor stated that data packs should be made available; this meant that the packs should be made sometime in the future. He asked why this had not been done. What did Armscor require from the Committee so that that could be done and be proactive going forward? The Minister of Defence had made comments that many members of the defence industry did have the capabilities to provide parts and services that Denel could not provide. It had been reported that there was a turnaround between Armscor and Denel, and it had not delivered the required results. What progress had been made in that regard? It was important that both Defence Material and the divisions and services who had the operating budgets from where the spares must be procured and the proper planning must be done. There was no way there was going to be proper planning going forward if the spares were ordered three months into the start of the financial year. If there was anything that the Portfolio Committee could do when interacting with National Treasury, Armscor should inform the Committee what the requirements were to interact with National Treasury so that the Committee could take it up with Treasury to have deviations in these requirements. He asked how much would the spares pools cost. If this was cut out as a cost savings, which was now costing the Department in terms of defence capabilities and was exposing the countrys safety and security. How much would it cost? The Department and Committee had to reconsider that strategy otherwise this issue would not be resolved. On the DDSI agreement that lapsed two years ago, he stated that he could not recall it being highlighted in such a manner. The Committee had asked Armscor for initiatives to rebuild the force. Was this reported? Could the Committee ask Armscor to report regularly to the Committee so that the Committee could have better oversight on maintenance issues so that the Committee could better intervene in the situation and help the defence force defend the country?

Mr D Ryder (DA, Gauteng) agreed with Mr Marais on proactive maintenance and stated that proactive maintenance should have been built into the way everything was done. The fact that it was only being brought to the table now was laughable. He would have loved to have the chief of logistics in the meeting so that the logistics people could speak on their side of this transaction. The mandate of this Committee was the budget function of the Department of Defence. It was clear that the budget function was not working in this instance. It was clear that Armscor was not allowed to plan its budgeting properly because it did not know what demands were coming. The majority of the maintenance should have been planned, and there should have been a good plan in place. He stated that programme eight detailed that maintenance and logistics needed to come in there, but there was no measurement in programme eight. To ensure that this was done, he requested that the Committee consider bringing in some maintenance measurements in the programme during the Committees budget review and recommendations report (BRRR) deliberations so that this became something that was in the minds of the administrators and became something that got a portion of the budget.

Mr T Mafanya (EFF) asked what Armscors relationship with Denel had been during its prime time. What challenges did they experience? Some of the predictions on the future budget that Armscor did. What stopped us from revitalising Denel once more? Denel had been doing very well until it collapsed. There was no concerted effort to destroy Denel. What stopped us from putting effort into revitalising Denel?

Responses
Adv Mbanda requested that the presenter from Armscor respond to questions. He stated that funding was the core issue of most of the concerns raised by the Committee.

On the DDSI, he replied that funding was an issue. Armscor was not contracted as the DDSI and therefore could not play that role.

On the challenges on the proposal that were presented, he replied that Armscor assisted with these matters and sat with their counterparts on duty to try and find the best possible solution within the funding constraints. If you wanted proactive maintenance and proactive procurement, you needed adequate resources. Sacrifices were made when the finances were not enough. Armscor was challenged not because it did not engage with its client environment but because it did not have enough funding to procure all the spares that it needed. He personally felt that National Treasury needed to be approached for a broader discussion.

The Chairperson stated that he would love to hear National Treasurys proposal on the matter. They might have additional input to make. He invited the presenter from Armscor to answer questions.

On Armscors relationship with Denel, he replied that Armscor had always had an open relationship with Denel. The problem with Denel at the moment regarding procurement of spares was the fact that Denel was cash-strapped. Denel was unable to purchase spares from a plethora of suppliers because they did not have funds. They owed many of the suppliers money and the supplier did not want to give them money because of that. Armscor had started to overcome this issue by identifying other suppliers who could procure the spares. This was why Armscor indicated that companies with the engineering expertise to re-engineer spares had the financial muscle to procure them before they were supplied to Armscor. This initiative has been implemented. Denel was busy with their turnaround, but they were not in a financial position to do this. Denel's situation regarding procuring and delivering spares for Armscor had not changed over the past two to three years.

The focus of this presentation was on the supply of spares. The spares that Armscor procured were spares that were provided to the South African National Defence Force, which did maintenance and repairs of those vehicles. Armscor also concluded maintenance contracts with various companies to maintain their transmission equipment. The underlying problem with the conclusion of maintenance problems and providing quality parts was funding. If the value of maintenance of transmission equipment from five years ago was compared to the amount of funds that Armscor received now for the same transmission equipment that had become five years older, it was clear that the funding was a fraction of what it was five years ago. This significantly impacted the continuous availability of the transmission equipment. There had been cases where Armscor had completely ceased to place maintenance contracts for certain equipment types because of the reprioritisation, as indicated by the CEO. This problem had become more visible in the aircraft environment. Where Armscor was cutting down on the maintenance of the available funds for maintenance contracts of aircraft types to the extent that OEMs did not want to enter into agreements with Armscor. This was why it was so difficult to maintain contracts in many instances. Armscor was cutting down on the value of maintenance contracts to the extent that they had to surrender several services. This severely impacted the availability of equipment types and not just the availability of spares.

The Chairperson stated that there was an attempt to differentiate in the responses between first line repairs by the different forces vis-à-vis the availability of spares under discussions, as well as the maintenance contracts that were also coming back to say that with the budget we were receiving that did not guarantee future work. Can that be unpacked just a little bit? He wanted to understand where the big problem was. Was it on the first line repairs or with the maintenance contracts?

The presenter from Armscor replied that the initial spares issue the presentation was trying to address was related to the spares that Armscor directly provided to the arms of service. The arms of services used those spares for equipment maintenance in addition to the first line maintenance that they did. This was normal usage of spares which they would normally replace the moment we got to second and third line maintenance. Armscor only addressed the issue of providing spares for first-time maintenance to the services, not the maintenance contracts themselves, which were different.

The Chairperson invited Defence Material to provide their responses.

Brigadier-General Mongezi Kweta, Chief Director: Corporate Communications, SANDF, replied that the approach was a little bit different. We could not continue looking at the symptoms that we had been dealing with and trying different solutions with them and expect that things would change because we were not dealing directly with the programme. The Department had started a programme of identifying what the problems were because everything that was being spoken about in the meeting was not necessarily problems but were symptoms of the problem. The Department and Armscor would be much closer to achieving the proposals made by the presenter from Armscor once they sat and attempted to identify what the issues were and jointly found solutions. There was a planned workshop wherein end users and their representatives would be roped in. Bringing all these role players in would help the Department find lasting solutions. Some of the few challenges included the interaction between the Departments environment and the end users vis-à-vis the engagements between the Department and Armscor.

On the solutions proposed earlier in the week by Armscor, he replied that the Department did have a few solutions and presentations prepared on them. These would be discussed in greater detail when the Department attends the workshop. All South Africans were aware of the challenges of defunding the defence force. The Department sought the Committees support. The Department hoped they would be able to appear before the Committee after they finished presenting to the other committees in the defence force.

The Chairperson stated that what he gathered was that the Chief of Defence Material did not see the problem in the same way and they bid for a slot for them to present the problem to the Committee and what solutions they had to tackle the problem. Only the Department could tell the Committee what they were doing about the problem. Armscor and the Department did not define the issues in the same way. The Chairperson revisited Mr Maraisquestion on the spares-pool contract that the Department pulled out on to save costs and on how the Committee could help the Department to overcome their challenges with data packs, and on the Ministers negotiations with Saudi members to take over some of Denels responsibilities.

Mr T Mmutle (ANC) stated that he did not hear an elaboration on the challenges that came with the OEM, particularly for the fact that there was in the spares contracts that they needed to embark on. How did Armscor or the Department move away from the OEM contractual obligation? Part of the challenges that General Kweta had raised was about the budgetary. How did one on the other side see that they had a problem with the budget but they also saw that they were enslaved into this OEM spares contract that were monopolies that manipulated prices and there were no plans to disrupt that? What was the plan to disrupt that and build capacity to ensure that there were players who were able to manufacture and supply spares at a reasonable price without relying on the very same manufacturers to certify them? It could not be correct that this situation carried on as is. Something needed to be done. Transformation required people who would be bold and would disrupt these monopolies that were building our governments. Armscor had presented its transformation charter to the Committee before. To what extent, under the concluded umbrella agreement, could Armscor assure the Committee that the transformation charter would be effected? It would be one of the conditions that it must be made for these agreements to see the light. If that was not done, then we would be left behind in terms of the agenda that they were supposed to thrive to transform this industry. How far were they? What were they doing under these agreements that they were talking about?

Ms A Beukes (ANC) stated that page four stated that the SANDF would provide Armscor with a multiyear funded requirement for spares; this would facilitate the procurement of items that are a challenge now. What was the relationship between Armscor, Denel, and the Department of Defence? When was the last engagement? Were they aware of these engagements to improve the availability of spares? If not, they must set clear timeframes, and a dedicated person to implement or monitor and report on the progress of this initiative.

Mr K Motsamai (EFF, Gauteng) stated that he saw that the SANDF had problems according to the Committees previous oversight visit. He thought that the government should pay Denel for Denel to assist the SANDF. The Committee should do an oversight visit to Denel to see whether Denel could provide. The apartheid government regularly fundraised for their defence force and they hardly had the problems that the SANDF was currently facing.

The Chairperson stated that the Department of Defences presentation should probably stand down until the Department had a chance to go to the workshop and discuss the issues and then come back with solutions. On the CEO stating that funding was an issue and Armscor was not appointed as the DDSI, he asked why was it so. Who was the DDSI? Denel and Armscor had relations for decades; why were these issues only being picked up now? On the scheduled maintenance, he asked why proactive maintenance regarding aeroplanes differed from proactive maintenance of vehicles. How would the proposals address the issue of funding? The Committee had made proposals on money being ring-fenced and National Treasury had responded positively to those proposals. What more did the Department want the Committee to do to address the funding issue, over and above the agreement that the Committee had already been able to reach with National Treasury?

Mr Marais added that the Committee had listened to the budget presentation and already knew what the overall budget of the Department of Defence was for the three years. How would the Committee reprioritise and plan from the inside if there was no money for these things? He knew that many South African defence industry members had said they were prepared to play different roles. Was using them not an option that had been considered? Armscor and the Department were to return to the Committee regarding the cost of the spares pools and whether the Committee could get feedback from Armscor on a quarterly basis to see the progress made on the maintenance challenges. He supported the Chairperson's suggestion that the next presentation should stand down until all the realities had been considered and sustainable solutions had been found.

Responses
Adv Mbanda stated that he would not want to leave the Committee with the impression that there was no progress with all the efforts into the challenges. The naval fleet showed that there was progress. There was a request for a proposal that was out looking at the refit of submarines. It took a lot of joint effort between the Armscor dockyard as well as the divisions in the navy to step back and actually understand what the source of the funding actually was and to say that the approach to maintenance had to be reviewed to ensure that there was an integrated approach between the dockyard and the end-user environment. It was important to acknowledge that dockyards had some capabilities but there was also an industry with some of these capabilities and maximising those strands within the industry should be considered. The dockyard was not where it needed to be but there was progress.

On the airforce environment, he replied that most of the platforms were serviced by Denel. Armscor did have the support contracts for most of the platforms.

The Chairperson told Adv Mbanda that the Committee understood that there was work that Armscor was doing; however, the Committees concern was on why their platform had to ground first before they received maintenance and then went back into operations. Why was there no proactiveness?

Adv Mbanda replied that it all boiled down to funding. If one had a vehicle, the vehicle would tell that it was new and would state when service was due; a motor vehicle plan would tell you about the readiness of the vehicle. If there was no vehicle plan, the fact remained that you parked your vehicle until you raised the funds for the maintenance. The dealership would not negotiate the price because the market determined the price. We were sitting with a situation wherein all the OEMs were not only servicing South Africa. Funding the maintenance of the aircraft remained an issue. There had been a maintenance regime throughout but now there was limited funding and you were trying to broker a deal with the supplier.

On why the DDSI contract was not funded and the work could not be continued, he replied that this probably needed to be looked at scientifically. The DDSI was an operational defence research institute within Armscor that was established precisely for the purpose of performing a scientific analysis that informed Armscor on the decisions they took. In hindsight, Armscor did not focus on what was strategically critical, but effort was being made to answer the questions adequately and then Armscor could engage with National Treasury in a scientifically informed manner. In so far as National Treasury had made additional R1.5 billion of funding available. Half of that money would go to the maintenance of the support of the C130s. It was one platform in a family of systems within the air force environment. Armscor had met with Denel. Denel was constrained but was amenable to the extent that they were willing to allow the industry to partner with them with the support of the client environment and the number of certain approvals that they got. This was working and there was open-mindedness from all the parties involved. This was a logical thing to do to resuscitate the defence industry.

The Chairperson stated that there was a question asking how much it cost Armscor to remain in the spares pool contract that Armscor pulled out on. This question was critical as it was in the same league as the DDSI question.

On Armscors participation in the spares pool, Mr Meshack Teffo, Group Executive: Acquisition & SCM, replied that Armscor no longer participated in the spares pool because of the limitation in the funding. It was indicated four or five years ago. Armscor would then crunch the numbers looking into the period in which Armscor ceased participating in the spares post today and see how much it would cost to participate in the spares pool again today. Armscor would share the requisite numbers with the Committee once they had those numbers.

On the conclusion of umbrella agreements and to what extent transformation found application, he assured the Committee that the defence sector code applied to Armscor. Armscor always had to ensure that they implemented the transformational objectives in whatever procurement process they embarked on in the defence sector. Armscor would also ensure that they affected the technology transfer, fostering local talent in the defence industry and transferring those talents to black SMMEs.

On the alternative sourcing arrangement of this paper, he replied that Denel was aware of the alternative sourcing arrangement. The only issue here was that Armscor embarked on this alternative sourcing direction because of the precarious financial position that Denel found itself in. Yes, Denel was involved at all material times.

On the engagements with Denel, he replied that Armscor had met with Denel and had established a steering Committee at an executive level. They met every second week to discuss threshold issues. Armscor had also entered into a memorandum of understanding with Denel wherein they looked into short-term, medium-term, and long-term interventions. To try to assist Denel in ensuring that it was able to stand on its own feet.

On the data packs, he replied that an Armscor member replied that they did have a problem with Denel. Armscor requested the database. Denel was not ready to surrender the data packs at that stage. Armscors CEO intervened and discussions were had. Those data packs were now being made available to Armscor.

On the OEMs and why Armscor did not move away from them, he replied that there were different reasons why it was best to remain with the OEMS for some equipment types, particularly with the aircraft in mind. This was a safety issue because the OEM of the aircraft took responsibility of the aircraft because they had to sign a release to service those aircraft. The moment someone who was not certified worked on the aircraft, their responsibility fell away with their certification of the OEM. There were previous examples of the air force itself assuming the responsibility of the aircraft certification in the cheetah aircraft where the South African Air Force had a very strong directorate system integrity on who could perform that analysis and sign off on the release service for these aircraft. The aircraft of the nature of the equipment that, Armscor did not have that ability.

On the vehicles, he replied that if a piece of equipment became obsolete for some reason, they had to search for an alternative or private alternative manufactured. They then had to certify that an alternative spare would function and guarantee the performance of that vehicle. Where the data pack and information regarding those vehicles became available, Armscor contracted whoever was willing to certify the spares.

The Chairperson stated that he was happy that the entities seemed to be starting to look at the problem in the same way. The jigsaw puzzle would be complete once the Committee received the Department of Defence presentation.

Mr Mmutle stated that he was not happy with Armscor's last response. It appeared that the entity was throwing its hands.

The Chairperson stated that the process of the meeting would hopefully answer Mr Mmutles questions. This discussion was complex and would be revisited in future. The Committee had to leave believing they had done everything humanly possible to ensure that all the challenges they found were addressed.

The Chairperson checked in with Ms Thobekile Gamede on whether the second briefing would be presented.

Ms Gamede stated that the second presentation was going to give updates on the status of the projects that were in Armscors environment and was going to share the Committees level of satisfaction in that regard. She understood that General Kweta more or less indicated that there had been misalignment and therefore, there was not much satisfaction. She would agree with standing down but preferred to give the final decision to the Deputy Minister. The Department could stand down and go to the workshop but then ensure that they unpacked all the issues that were intended to be unpacked as well the issues asked by the Committee so that the Committee could come back with a comprehensive presentation that had a way forward. The issues were multifaceted and went beyond just funding issues.

The Deputy Minister thanked both the entities for their presentations. He agreed with Ms Gamede that the workshop should take place so that the Department could grind the sausage and come back with a submission that could address the issues raised in the Committee. He stated that maintenance had to be proactive and not just reactive. It was mind-boggling that the Committee was speaking about Armscor which was managing a budget of R26.2 billion. Armscor must have capacity to handle the volume of activities it would be responsible for, given that Denel was now in its own stable. The Committee should reconvene in April. He shared that he heard the concerns that the entities should report to the Committee more regularly; however, his take was that those reports were the business of the Committee because it was the Committee that conducted oversight over the budget allocation and spending.

SANDF Reserves Presentation

Admiral Anthony Morris, Chief Director: Defence Material, disclaimed to the Committee that the information provided in the presentation was mainly operational in nature.

Brigadier General Zoleka Niyabo, Acting Chief of the SANDF Reserves, SANDF, took the Committee through the presentation.

She stated the business case for reserves stating that the reserves had proved to be cost effective, the reserves were making and could continue to make a significant contribution to the development of the SANDF.

On the matters affecting the business case, she stated that the current funding regime would lead to a further decline of reserves over the medium term. There was an issue with the age of reserve members. One of the reasons for this was because the reserve force had not recruited in the past five years. Services were currently recruiting according to their attrition. There was an urgent need to rejuvenate the reserve force component.

The overall challenges facing the SANDF reserves included:

• The reduced man-day budget from R2.6 million to R1.9 million man–days. This impacted the force employment goals that could be fulfilled.

• The limited leader group development. This led to stagnation and a lack of rejuvenation.

• The restricted continuation training. The risk here was that the deploying forces would not be combat-ready.

• The lack of a feeder system as there have not been any more new intakes from the Military Skills Development System (MSDS) since 2016.

• The lack of a feeder system resulted in an ageing force. The average age would continue to rise due to no rejuvenation taking place.

Success in the army reserves operations included:

• The successful implementation of Project Koba-Tlala as well as the re-skilling of more than 1 127 reserve members as part of this project from the 2018/19 financial year in security training, community development and liaison, agri-related training, water and sanitation, water purification, fire-fighting, first-aid, coding and data science.

• The reserve force mechanics and chaplains had been deployed.

The defence force was determined to confirm the strategic purpose of reserves and reprioritise the roles of the reserve force, re-enforce the business case of the reserves, address the ageing force and gender imbalance linked to the lack of a new intake, as well as to rejuvenate the reserve force.

See attached for full presentation

Discussion
Mr Marais welcomed the presentation and found that it painted a really good picture of the situation at hand. Unfortunately, on the one side, it confirmed that there was absolute reliance on the reserve force; on the other, it gave an enormous bleak picture of the future. He re-emphasised that the current 2015 defence review had greatly emphasised a bigger and increased reserve force component and a smaller regular force component. He was glad that the presenter confirmed that it actually cost the Department less to enrol or to use the reserve force than to use the regular force. There was a lot of confusion about the role of the reserve force. The regiment was a concern. How did the reserve force and the regiments work together? The regiments are a feeder scheme and a base for the reserve force members. What role did they play as a feeder scheme and rejuvenation mechanism? On the role and functions of the reserve force council, the reserve force council was meant to be a statutory body that was specifically for the reserve force and the reserve force members. He had not seen any mention of the reserve force council and what role they could play in addressing rejuvenation, the feeder channel of reserve force members, all the channels that had been highlighted, and how they, as an advisory council to the Minister, could ensure that we did not experience any situations where we did not experience a situation where the age of the members of the defence force was getting so high that the members became inefficient. He highlighted the importance of the reserve bank by stating that Operations Prosper, Corona, Mistral, And Vikela could not be done without the reserve force. It was important that there was a strong look into the budget. The budget was not the problem of the reserve force because the money had to be provided. The money had to be there if the reserve force members were called up. The Committee had to come up with solutions to deal with the reserve force problems. We could not do without the reserve force. He had always been of the view that there were reserve force members that could maintain the Departments vehicles. The Committee should actually use military reserve force members and military veterans to maintain vehicles. The Committee had heard about the one force concept, which had always been promoted as something that was standing but was now being presented as a challenge. The Committee had also heard about the Mzansi Home Guard, which was a fantastic concept. However, if this home guard could not stand on its own feet and on its own budget. It was highly unlikely that Mzansi Home Guard would get off the ground because it had to now compete with the defence force and the regular force for the same money. He urged the reserve force to work together with the reserve force council to come up with a one force concept from the reserve site so that there were workable options on the table. He stated that the points made in conclusion should be regularly measured and reported back to the Committee so that the Committee could know the extent of the deterioration of those concepts.

Mr Ryder stated that the latest budget speech showed that ad hoc deployments were required and funding would be made from the contingency reserve. He welcomed this. On the need for a real review of the structure of the defence force and the structure of the budget, more specifically, he asked where the money was being spent. Where should the money be spent? South Africa needed to decide what defence force it needed. He appreciated the presentation and understood the difficulty of trying to run the reserve force. He found it highly problematic that the reserve force members were left on the street with no money or up-skilling when the Department no longer required their services. The discontinuation of the university training programme for funding reasons was a hard pill to swallow for people who were trying to prove themselves. What was the Department going to do to ensure that they fixed the budget and that money was being spent in the right place? He also asked about the battles happening in Cabinet when the time came to work out how to catch up with the pilot.

Mr Mmutle stated that it should be noted that the perspective of the one force concept had purpose and meaning that should not exclude the defence force. Therefore, the recruitment that had been done by the defence force to what extent did this become a feeder to reserve force? The presentation showed that the numbers reduced yearly. The impact of this reduction might not be realised today but might haunt the Committee in future. The ratios that had been determined had to be adequately adhered to to balance the reserve force and the regular force to have a holistic force that would complement each other. Could the Department clarify how the concept being spoken about could influence those processes or was it just a concept that was being ignored when it came to processes?

Responses
Brigadier-General Niyabo stepped in to respond to questions.

On the regiments, she replied that her division supported the regiments with everything that they required. Even though the regiment might have had young members, the services could not really recruit young people for rejuvenation because the services could not recruit reserves even though they wanted to.

On what the impact of recruitment did to assist the division, she replied that in the past, the division used to rejuvenate by taking the MSDS members who would not be given the co-service contract at the end of the two years. That did not happen anymore because services were recruited according to their attrition. They recruited people they knew would be available after two years of serving as MSDS members. They had vacancies for people who would be retiring. There was no budget to recruit reserves even if the regiment had young people who could rejuvenate the reserves component. The division requested two streams of recruitment where they said there would be MSDS for regulars and another stream for reserve force members even though it was proved that the Department could not afford it. She echoed Mr Ryders sentiments that the Department must decide how it would use the funds where they were required. There was nothing the Department could do to resolve the deficit issue. This affected the reserves issue to the extent that the Department did not have enough reserves to deliver on its own mandate.

On the reserve force council (RFC), she replied that the RFC also had a role to play in the rejuvenation. They had a budget where they assisted the reserve members with military skills. There was a decision for them to form a portal where the Department would have all of its reserve force that would reside with the RFC and the different skills that they had so that the Department could just turn to that portal when the Department sought to re-skill or provide the reserves with alternate employment. She could not report on what the RFC had done as the RFC did not report to them. The division shared their challenges with the RFC and they knew where they could assist.

On the flying squad issue, she replied that the flying squadron issue went back to the funding issue. Even though there were problems with the links supporting marine operations in the Western Cape. The air force could not afford this flying squadron. The aircraft could come at a cost. Even though there was a continued requirement. In the past, the air force reported that they couldn't afford the aircraft. Affordability remained an issue.

On the operations she mentioned, she replied that she mentioned all the operations in slide eight and the impacts the reserve force had had. She also mentioned the number of reserve force members deployed to the different operations.

Maj General Steven Marumo stepped in to answer questions.

On the regiments, he replied that the problem with regiments was that they were local and were based on different masterings. He used the Potchefstroom regiment as an example to show the difficulty mastering presented when deploying. When no people wanted to join a particular regiment, one ended up having people from different masterings in that regiment. Therefore, those people had to be deployed in a common role if they wanted to be deployed. There had been trouble forming organised regiments due to people lying around.

On the percentage of the reserve force question asked by the Chairperson, he replied that it would always be a problem. There has not been any recruitment in the reserve force since 2016. This was a bit problematic.

Mr Marais asked whether the reserve force was structured in reserve force units or in a national database. How were the reserve force units grouped to be called up and prepared? This could show that there was an outdated regiment system that could not help with the tasks at hand and a solution to this problem would need to be found. Was there no chance of getting in touch with the MSDS programme to recruit those who did not get into the regular force to be recruited into the reserve force? We could not go to war with an old age home. This needed to be addressed.

General Niyabo replied by stating that the database for the reserves was with the services. Those that were in the regiment fell under the chief army database. Even if a division wanted to utilise reserve force members, they would have to go through a service. All MSDS members have been given core service contracts for the past three years. Only those with disciplinary issues or those who did not meet the requirements to be translated into core service contracts did not get core service contracts. In the past, a number of MSDS members who did not get core service contracts would be recruited into the reserve. However, all three services had been recruiting according to their attrition for the past three years. This was going to be worse considering the fact that the Department was recruiting every second year. The SANDF no longer received members who had not been provided with the core service contract.

Mr Mmutle stated that we were generally in trouble in terms of budgetary constraints. This was unfortunate but understandable, given the challenges that the Chief Reserves Division faced.

The Deputy Minister thanked the Chief Reserves Division for the presentation. He stated that the situation at the reserves was concerning and pointed out that the numbers were going down. The reserve force was losing strength. There were developments in the right direction. The decision was taken to include all of the reserves in all of the training programmes that were arranged for the permanent force for every training course taken, ten percent should be for the reserve. It would assist if all the arms of service reserves were to follow in that direction. There were encouraging developments that the collapse of the reserves was now done by a committee for collapse. This would increase the integrity in the management of collapse. The one force concept should not just be an idea but should be a practice that governs the way in which South Africas defence force was structured. The establishment of other reserves in the unit needed to be firmed up for implementation.

Mr Marais requested that the final presentation be sent to the Committee. Brigadier General Niyabo stated that they would send the presentation.

Consideration of minutes
Mr Ryder proposed that the consideration of minutes be postponed to a different meeting when the Committee had more time.

The Committee seconded this proposal.

The meeting was adjourned.

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