India ‘unofficially’ blacklisting us: South African arms maker

By Fakir Hassen, IANS,

Johannesburg : An “unofficial” blacklisting by India has resulted in South African arms manufacturer Denel losing two billion rands in revenue, a company executive has told parliament.

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The parastatal company’s group executive for business development Zwelakhe Ntshepe said Denel was seeking diplomatic assistance from the South African government to recapture the Indian market.

“We have been blacklisted, not officially, but the behaviour shows. They don’t invite us to tender, they cancel existing contracts. It’s been going on for the past four years,” Ntshepe was quoted as telling the parliamentary portfolio committee on pubic enterprises by the Sunday Times here.

In 2005 Denel faced allegations of paying commissions to a middleman for a deal to supply rifles to India. Since then, the ailing company has not had any invitation to tender for any Indian government armaments contracts.

But the 2005 issue was not discussed at all in Wednesday’s presentation to parliament. Denel had previously declined to comment on the commission allegations, citing confidentiality clauses in the contract.

Defending its survival largely through government bailouts, Denel said India had become a “no-go market”, sharply contributing to the company’s losses for the past three years as a result of shrinking global markets.

Ntshepe said discussions with the Indian government were ongoing after authorities there had investigated the allegations and not brought any charges against Denel.

Diplomatic efforts by the South African government had failed to resolve the impasses, with Denel considering asking for government intervention again.

Portfolio committee chairperson Mabel Mentor queried whether the IBSA (India-Brazil-South Africa) tripartite cooperation initiative had not helped ease the situation, but Ntshepe merely replied that relations with India were “difficult”, the Sunday Times reported.

The weekly added that the admission about India’s shunning of Denel came in the same week that recently appointed Minister of International Relations and Cooperation Maite Nkoana-Mashabane reflected on the strong bilateral relations between India and South Africa.

“With India, we share a strong historical relationship spanning through the 20th century. Ours has been a relationship steeped in political and struggle,” Nkoana-Mashabane, a former high commissioner to India, had said during her department’s budget vote in parliament earlier last week.

Denel has been running losses since 1998, but the annual loss has been steadily declining from 1.3 billion rand in 2006 to 549 million rands in 2007 and 347 million rands in 2008.