EXCESSIVE STOCK MANAGEMENT WITHIN THE DEPARTMENT OF DEFENCE

1
EXCESSIVE STOCK MANAGEMENT WITHIN THE DEPARTMENT
OF DEFENCE

• Portfolio Committee on Defence
• 26 August 2003

2
DOD DELEGATION

• Presenter
• Major General T.A. Ntsibande - Chief Logistics
• Representatives
• SA Army Brigadier General I.R. Johnson
• SA Air Force Major General E.H. Dert
• SA Navy Rear Admiral (JG) T.M. Butler
• SAMHS Brigadier General H. Wallis
• DOD Log Sup Fmn Brigadier General B. Links
• Logistics Division Colonel M.J. Craig

3
AIM

• To inform the Portfolio Committee on Defence on
  the progress made with the management of
  excessive stock in the DOD

4
SCOPE

• History
• Modus Operandi
• Current status within the DOD
• ARMSCOR initiative
• Present Situation
• Problems encountered
• Current actions taking place in
• SA Army
• SA Air Force
• SA Navy
• SA Military Health Service

5
HISTORY

• 1998 Auditor General report
• SCOPA
• Reasons originally given for excessive stock
  position
• Weapon and equipment stockpiling during embargo
  period
• Transformation process
• DOD still determining new Force Design

6
Modus Operandi

• Each Service and Division manages own disposal
  plans
• Reports progress on a monthly basis to Chief
  Logistics
• Progress managed at top level
• Streamlined disposal process
• Use ARMSCOR as disposal agent

7
CURRENT STATUS

• During 2003/2004 financial year 171 disposal
  plans are being managed to the total value of RB
  4,812.
• Plans are being managed by
• SA Army 31 Plans RB 2,445
• SA Air Force 98 Plans RB 1,695
• SA Navy 34 Plans RM 643,2
• SAMHS 8 Plans RM 29,229

8
Armscor Initiative

• ARMSCOR presently being used as an agent to
  manage all Cat 1 equipment that is to be disposed
  of, on behalf of the DOD.

9
Present Situation

• Disposals
• 3 Auctions RM 5.1
• 11 Tenders RM 4.9
• Donations to Namibia (144mm ammo)
• RM 90,45 (2 839 tons)
• ARMSCOR
• 102 transactions Stock Sales RM 155
• Stock Transfer of Cat 1 equipment - RM 325
• Problems
• Ammo Disposal Plant
• NCACC
• Ledger values

10
Problems Encountered

• Ammo Disposal Plant
• 141 000 tons of ammunition
• Average age 17 years old
• 90 out of manufacturers warranty (10 -11 years)
• 67 000 tons expired, obsolete, redundant,
  re-workable, or un-serviceable
• Safety not guaranteed by manufacturer
• Need a safe environmentally friendly disposal
  capability
• Request for proposal to industry on 4 Jul 2003
• Response has been received
• NCACC
• Local buyers have to register with NCACC
  lengthens process

11
SA ARMY

• Down Managing of Excessive Stock

12
SA ARMY

• CURRENT SITUATION
• The SA Armys only approved force structure is
  that of the transitional force design.
• Until such time as the affordable structure is
  approved no responsible down scaling can be done
  of (any) serviceable equipment.
• For this reason only obsolete and beyond
  economical repair equipment to the book value of
  RB 2.445 has been programmed for disposal.

13
SA ARMY

• APPROACH TO DISPOSAL
• The main focus of effort concentrated on the
  Auditor Generals concern that in the SA Armys
  case there is excessive stock in the depots.
• With this in mind armoured vehicles, air defence
  and vehicle platforms were concentrated on to
  decrease the monetary value of the stock.
• Other systems will be handled concurrently with
  the view to decreasing the number of items.

14
SA ARMY

• ARMOURED VEHICLE SYSTEMS
• The Army has standardised on the following
  Armoured systems Ratel Mk 3, Rooikat Mk 1 (Lot 3)
  and Olifant Mk 1A for the medium term and Olifant
  Mk 1 B for the long term..
• Ratel Infantry Fighting Vehicle MK 12 (99) RM
  325 (31 Oct 02 29 Aug 03).
• Ratel Mk3 Infantry Fighting Vehicle 3 (100) RM
  320 (sold).
• Ratel Mk 3 Infantry Fighting Vehicle (155) RM 487
  (30 Jun 03 26 Sep 03).

15
SA ARMY

• ARMOURED VEHICLES (CONT)
• Rooikat Armoured Car PPM (28) RM 196 (3 Mar 03
  25 Nov 04).
• Rooikat Armoured Car Mk 1 (6) RM 84 (3 Mar 03
  27 Feb 04).
• Eland Armoured Car (80) RM 23.5 (on marketing
  list 27 Apr 03).
• Olifant Tanks Mk 1A (14) RM 68 (on marketing list
  25 Mar 03).

16
SA ARMY

• INFANTRY
• After previous widely publicised disposal efforts
  very little remained. The routine expiry of
  parachutes for safety reasons were also included
• Rifle Magazines ( 134 000) RM 6 (On stock list)
• Parachutes (2 300) RM 2 (3 Sep 03 -11 Nov 03)

17
SA ARMY

• ARTILLERY
• The GV1 25 pdr down graded to ceremonial and
  burial duties only the last remnants of the 140mm
  not donated to Angola
• GV2 140 mm Gun ( System) RM 9 (3 Apr 03 -27 Feb
  04)

18
AIR DEFENCE ARTILLERY
19
SA ARMY

• AIR DEFENCE ARTILLERY
• The Air Defence has standardised on the 35 mm Mk
  5 system and all other systems now obsolete
• 35 mm Mk 1 System (100 Guns) RM 1,103 (19 Mar 03
  2 Feb 04).
• 20 mm (117 Guns) RM 115 (4 Mar 03 2 Feb 04).
• 14.5 mm (24 Guns) RM 6 (4 Mar 03 2 Feb 04).
• 23 mm (32)m RM 96 ( 29 Jul 03 20 Jun 07).

20
AIR DEFENCE ARTILLERY
21
SA ARMY

• CLOTHING
• Major effort here was to rid the SA Army of the
  remaining odd sizes of Nutria clothing not enough
  to issue even a single units intake.
• Nutria Clothing (System) RM 41 (On stock list)
• Obsolete Women's Clothing (Various) RM 7 (20 Jul
  03 - 29 Mar 04)
• General Commodities (Various) RM 9 (20 Jul 03 -
  29 Mar 04)

22
SAMIL TRUCK
23
SA ARMY B VEHICLES

• Samil Vehicles in Vehicle Reserve Park (1704) RM
  283
• (Transferred to Armscor for sale)
• Samil Vehicle Spares (Various) RM 64
  (2004/2005)
• Samil Vehicles at Units (1,049)
• RM107 125 978 (2004/2005)

24
SA ARMY

• C VEHICLES
• 580 C Vehicles will be phased out in the short
  to medium term
• C Vehicles (73) RM 3 191 000 (12 Feb 03-15 Aug
  03)

25
SA ARMY

• FUTURE INTENT
• As soon as the Affordable Force has been approved
  by the Minister the SA Army will determine
  surpluses and initiate a second major wave of
  disposal

26
SA AIR FORCE

• Management of excessive stock

27
SA AIR FORCE

• Imperatives
• SCOPA resolutions
• Treasury Regulations
• Revenue accrued from sales
• 98 disposal plans
• Consolidated into 7 groups
• Total value RB 1,695

28
Impala Mk II
29
SA AIR FORCE

• Impala Mk I and Mk II aircraft
• 38 aircraft, 11 on tender in Mar 03
• NCACC authority awaited
• Start date 15/1/1997
• Expected end date 31/12/2003
• Value R5 430

30
Mirage F1
31
SA AIR FORCE

• Mirage F1 aircraft
• 21 aircraft including spares
• Gabon interested in 6 aircraft
• Start date 09/09/1997
• Expected end date 31/12/2003
• Value RM 520

32
Cheetah C and D
33
SA AIR FORCE

• Cheetah C and D aircraft
• 3 Cheetah D dual seat aircraft
• 17 Cheetah C single seat aircraft
• Brazil interested in 14 aircraft
• Start date 12/03/1999
• Expected end date 31/12/2003
• Value RM 2 (Cheetah D)
• Value R 0 (Cheetah C)

34
Alouette III
35
SA AIR FORCE

• Alouette III Helicopters
• 3 aircraft
• 7 stripped down airframes
• Stripped down airframes on tender in March 03
• Awaiting NCACC authority
• Start date 06/02/2002
• Expected end date 31/12/2003
• Value RM 1

36
BOEING 707
37
SA AIR FORCE

• Boeing 707 aircraft
• 2 aircraft including spares
• Spanish firm registered interest
• Need to return aircraft to flying condition.
  ARMSCOR investigating
• Start date 06/02/2002
• Expected end date 31/12/2003
• Value RM 1

38
C-47 Dakota TP
39
SA AIR FORCE

• C-47 TP Dakota aircraft
• 2 aircraft
• 1 fuselage
• 2 aircraft recently sold. Finalising sale.
• Start date 01/02/2002
• Expected end date 31/12/2003
• Value RM 6

40
SA AIR FORCE

• Spares, engines, armament and tools
• 40 plans
• 11 plans on tender in Mar 2003
• Start date 01/06/2002
• Expected end date 31/12/2003
• Value RB 1,135

41
SA NAVY

• Excessive stock management

42
SA NAVY

• Current situation
• Qty 34 disposal plans consolidated into 7 groups
  (sub-plans) to value of RM 643,2.

43
SA NAVY

• Current actions taking place
• Ordnance Spares at Depots (7 sub-plans)
• EOD/IEDD Equipment
• Mk 44 Torpedoes
• Non Ops Small Arms
• R4 Rifle Accessories
• 40/60 Weapons System
• Gun Mountings 40/60 Mk 5
• 20mm Guns and Mountings

44
SA NAVY

• Ordnance Spares at Depots (cont)
• Start Date 28/09/00
• End Date 30/09/03
• Value RM 2,29 (excluding 40/60 Weapon System as
  value still awaited)

45
Minesweepers
46
Minesweeper
47
SA NAVY

• TON Class Minesweepers (6 sub-plans)
• SAS KIMBERLEY (platform)
• SAS EAST LONDON (platform)
• SAS WINDHOEK (platform)
• SAS WALVISBAAI (platform)
• Influence Sweep Gear
• Minesweeper Inventory
• Minesweepers
• Start Date 18/07/00
• End Date 22/10/02 (sold on tender)
• Value RM 2,6

48
SA NAVY

• Minesweeper Influence Sweep Gear
• Start Date 18/07/00
• End Date 22/11/02 (to be sold on tender)
• Value R380 184
• Minesweeping Inventory
• Start Date 03/04/00
• End Date 26/03/04
• Value Awaited

49
Strike Craft
50
SA NAVY

• Warrior Class Strike Craft (10 sub-plans)
• SAS JAN SMUTS (platform)
• SAS SHAKA (platform)
• SAS SEKUKHUNE (platform)
• SAS RENE SETHREN (platform)
• SAS ADAM KOK (platform)
• SAS ISAAC DYOBHA (platform)
• SAS GALESHEWE (platform)
• SAS JOB MASEGO (platform)
• SAS MAKHANDA (platform)
• Strike Craft Inventory

51
SA NAVY (cont)

• Strike Craft
• No 1- 3 No 4 No
  5 No 6 No 7- 9
• Start Date 03/10/01 03/10/01 01/10/04
  01/01/04 02/07/07
• End Date 20/12/02 16/09/09 11/05/05
  07/09/06 05/06/09
• Value RM 90,0 RM 30,0 RM 30,0 RM
  30,0 RM 90,0
• Strike Craft Inventory
• Start Date 07/01/08
• End Date 11/12/09
• Value Awaited

52
SAS SPEAR
53
SAS SPEAR
54
SAS SPEAR
13 July 2003
55
SAS SPEAR
24 July 2003
56
SAS SPEAR
28 July 2003
57
SA NAVY

• Daphne Class Submarines (5 sub-plans)
• SAS SPEAR (platform)
• SAS UMKHONTO (platform)
• SAS ASSEGAAI (platform)
• Submarine Spare Inventory
• Submarine Weapons (Torpedoes)
• Submarines
• No 1 (sold) No 2
  No 3
• Start Date 15/02/01 16/06/02
  16/09/02
• End Date 08/11/01 13/05/04
  11/05/04
• Value RM 120,0 RM 120,0 RM
  120,0

58
SA NAVY

• Submarine Spares Inventory
• Start Date 01/04/02
• End Date 14/05/04
• Value Awaited
• Submarine Weapons (Torpedoes)
• Start Date 01/08/03
• End Date 14/05/04
• Value Awaited

59
SA NAVY

• Support Ships (1 sub-plan)
• SAS FLEUR (platform)
• Start Date 21/07/03
• End Date 12/03/04
• Value RM 2,5
• Small Boats (5 sub-plans)
• Harbour Patrol Boats (donation qty 4)
• Deutsche Schlauchbote (DSBs)
• Ferry Malgoga
• Delta Boats (Qty 6)
• Vredenburg Boats (Qty 4)

60
SA NAVY (cont)

• Small Boats (cont)
• Harbour Patrol Boats (2 donated, 2 to be donated)
• Start Date 15/01/02
• End Date 12/03/04
• Value R720 000
• Deutsche Schlauchbote (DSBs)
• Start Date 03/06/02
• End Date 28/11/03
• Value Awaited
• Ferry Malgoga
• Start Date 03/06/02
• End Date 29/08/03
• Value R300

61
SA NAVY (cont)

• Small Boats (cont)
• Delta Boats (qty 6)
• Start Date 05/08/02
• End Date 29/08/03
• Value R538 188
• Vredenburg Boats (qty 4)
• Start Date 16/06/02
• End Date 18/09/03
• Value R299 596

62
SA NAVY

• Obsolete Depot Stock (ongoing)
• Bill of Material (BOM) Project by linking items
  of supply (IOS) to next higher assembly. IOS,
  which cannot be linked to an end use by means of
  the BOM, would therefore be candidates for
  disposal.
• As process is being progressed in a fragmented,
  but continuous manner.
• Total value to date and forwarded to the DOD Log
  Support Formation for disposal action is RM
  3,868.

63
SA MILITARY HEALTH SERVICE

• Excessive stock management

64
SA MILITARY HEALTH SERVICES

• Current situation
• 8 disposal plans consolidated into 7 groups
  (sub-plans) to value of RM 29,229

65
SA MILITARY HEALTH SERVICES

• Disposal Plans
• Nutria Material R985 795
• Nutria Uniforms RM 6,2
• Vehicles SAMHS R729 151
• Signal Equipment Unknown
• Rinkhals Ambulances RM 19,8
• Metro Ambulances RM 1,33
• B and D SAMHS Vehicles Unknown
• Old SAMHS rank insignia R178 000
• Total value RM 29,22

66
QUESTIONS?
67
Thank You!