South African Aerospace and Defence Ecosystem MASTERPLAN 2020
Total Page:16
File Type:pdf, Size:1020Kb
Aerospace and Defence- Final Masterplan 2020 South African Aerospace and Defence Ecosystem MASTERPLAN 2020 Francois Denner;Philip Haupt;Khalid Manjoo;Jessie Ndaba;Linden Petzer;Josie Rowe-Setz. Defence Experts: H Heitman, CM Zondi BLUEPRINT | Page Aerospace and Defence- Final Masterplan 2020 Acronyms A&D Aerospace & Defence AfCFTA African Continental Free Trade Area AISI Aerospace Industry Support Initiative AMD Aerospace Maritime Defence (Industries Association) AMO Approved Maintenance Organisation APDP Automotive Production and Development Programme BASA Bilateral Aviation Safety Agreement BB BEE Broad Based Black Economic Empowerment CAA Civil Aviation Authority CAASA Commercial Aviation Association CAIDS Commercial Aerospace Industry Development Strategy CAMASA Commercial Aerospace Manufacturing Association CAV Centurion Aerospace Village CIS Communications and Information Services CSIR Council for Scientific and Industrial Research COTS Commercial Off the Shelf CSPD Competitive Supplier Development Programme CTK Cargo & mail Tonne/Km DARPA Defense Advanced Research Projects Agency DCAC Directorate of Conventional Arms Control DCDT Department of Communications and Digital Technologies DFI Development Finance Institution DHET Department of Higher Education and Training DIP Defence Industrial Participation DIRCO Department of International Relations and Cooperation DoD Department of Defence (South Africa) DPE Department of Public Enterprises DSI Department of Science and Innovation DTIC Department of Trade, Industry and Competition EACP European Aerospace Cluster Programme EASA European Union Aviation Safety Agency EDP Enterprise Development Programme EO Earth Observation EOC Executive Oversight Committee i | Page Aerospace and Defence- Final Masterplan 2020 ESEID Economic Sectors, Employment and Infrastructure Development EXIM Export-Import (Bank) GDP Gross Domestic Product GGDA Gauteng Growth and Development Agency GPS Global Positioning System GSO Geo Stationary Orbit GTAC Government Technical Advisory Centre GVA Gross Value Added GVC Global Value Chain HVAC Heating, ventilation, and air conditioning IATA International Air Transport Association ICAO International Civil Aviation Organisation ICT Information and Communications Technology IDC Industrial Development Corporation IP/IPR Intellectual Property/Intellectual Property Rights IPA Intelligent Pilot Assistant IPMS Integrated Power Management Systems ITA International Trade Administration JASC Joint Aerospace Steering Committee KZN KwaZulu Natal M & E Monitoring and Evaluation MALE Medium-altitude long-endurance (unmanned aerial vehicle) MOTS Military Off the Shelf MRO Maintenance, Repair & Overhaul MTBPS Medium-Term Budget Policy Statement MTEF Medium Term Expenditure Framework NAC National Aerospace Centre (Wits) NCACC National Conventional Arms Control Committee NEDLAC National Economic Development and Labour Council NDIC National Defence Industry Council NGSO Non- Geo Stationary Orbit NICC National Infrastructure Coordinating Council NIF National Infrastructure Fund NIP National Industrial Participation programme NPAT Net Profit After Tax NSI National System of Innovation NT National Treasury OEM Original Equipment Manufacturer OPV Optionally Piloted Vehicle PIC Public Investment Corporation ii | Page Aerospace and Defence- Final Masterplan 2020 PKO Peace Keeping Operations POPI Protection of Personal Information Act R&D Research & Development RD & I Research, Development and Innovation RFI Request for Information ROI Return on Investment ROIC Return on Invested Capital RPAS Remotely Piloted Aircraft System RPK Revenue Passenger /Km SAA South African Airways SAAT South African Airways Technical SACAA South African Civil Aviation Authority SACU Southern African Customs Union SADC Southern African Development Community SANDF South African National Defence Force SANSA South African National Space Agency SAR Synthetic Aperture Radar SARS South African Revenue Services SATAWU South African Transport and Allied Workers Union SBAC Society of British Aerospace Companies SBAS Satellite Based Augmentation System SBU Strategic Business Unit SCAMP Strategic Capital Acquisition Master Plan SCM Supply Chain Management SDA Special Defence Account SDP Supplier Development Programme SEIAS Socio Economic Impact Assessment System SEZ Special Economic Zone SITA State Information Technology Agency SME Small, Medium Enterprise SMME Small, Medium and Micro Enterprise SOE State Owned Enterprise STEM Science, Technology, Engineering and Mathematics TIA Technology Innovation Agency UAM Urban Air Mobility UAS Unmanned Aerial System UAV Unmanned Aerial Vehicle UTM Unmanned Aircraft Systems Traffic Management VC Value Chain WAAC Weighted Average Cost of Capital WTO World Trade Organisation iii | Page Aerospace and Defence- Final Masterplan 2020 Table of Contents 1. INTRODUCTION 1 1.1 MASTER PLAN CONSULTATION 1 1.2 PRELIMINARY COMMITMENTS 1 1.3 THE AEROSPACE AND DEFENCE ECOSYSTEM 8 1.3.1 DEFENCE 9 1.3.2 AERONAUTICS- COMMERCIAL, & CIVIL 11 1.3.3 SPACE 14 1.3.4 SUB SEGMENTS- CONCLUSION 15 1.3.5 IMMEDIATE OPPORTUNITIES- DEFENCE 16 1.3.6 MEDIUM TERM OPPORTUNITIES 21 2. OVERVIEW & BACKGROUND ANALYSIS 28 2.1 AEROSPACE AND DEFENCE 32 2.2 IMPACT OF DEFENCE BUDGETARY CONSTRAINTS 34 2.3 IMPACT OF COVID 19 ON COMMERCIAL AERONAUTICS, DEFENCE, AND SPACE 34 2.4 IMPACT ON TRADE (AND RELATED STATE REVENUES) 35 2.5 STRENGTHS & OPPORTUNITIES 35 2.6 IMMEDIATE PATH 37 3. FOCUS ON THE MASTERPLAN 38 4. DETAILED MASTERPLAN TABLES 39 iv | Page Aerospace and Defence- Final Masterplan 2020 5. ANNEXURES 56 5.1 ASSESSMENT MATRIX FOR SUB VC SELECTION (EXAMPLE) 56 5.2 ADDITIONAL POSSIBLE EXPORT SHORT-TERM REVENUE GENERATION OVERVIEW 57 5.2.1 OMAN 57 5.2.2 PAKISTAN 57 5.2.3 UNITED ARAB EMIRATES 57 5.2.4 DENEL LAND SYSTEMS 57 5.2.5 DENEL VEHICLE SYSTEMS 57 5.2.6 BRAZIL 57 5.3 DEFENCE INDUSTRY STABILISATION 58 5.3.1 BADGER (PROJECT HOEFYSTER): 58 5.3.2 ROOIVALK MK 2 58 5.3.3 RATEL MODERNISATION, UPGRADE AND CONVERSION 58 5.3.5 SAMIL REPLACEMENT (PREVIOUSLY PROJECT VISTULA) 59 5.3.6 UMKHONTO: 59 5.3.7 LEO 59 5.3.8 PROJECT MARLIN 59 5.3.9 C-RAM 59 5.3.10 FISM AND IMPI 59 5.3.11 SHIPBUILDING 60 5.4 AEROSPACE AND DEFENCE- SELECTED ECONOMIC MULTIPLIER EFFECTS 61 5.5 PROCUREMENT PROCESS & SUPPLY CHAIN – RECOMMENDED REFORMS 64 5.5.1 PROBLEM STATEMENT 64 5.5.2 KEY ISSUES 64 5.5.3 RECOMMENDATIONS 65 5.6 OVERVIEW- PROGRAMMES 67 5.6.1 NATIONAL INDUSTRIAL PARTICIPATION PROGRAMME (NIP) 67 5.6.2 DEFENCE INDUSTRIAL PARTICIPATION (DIP) 67 5.6.3 COMPETITOR SUPPLIER DEVELOPMENT PROGRAMME (CSDP) 68 5.7 ECONOMIC RECONSTRUCTION AND RECOVERY PROGRAMME (ERRP) 69 v | Page Aerospace and Defence- Final Masterplan 2020 Figures Figure 1- Commercial Aeronautics growth trends ...................................................................................... 12 Figure 2- Project Space revenues by type ................................................................................................... 15 Figure 3- The Apex Ecosystem .................................................................................................................... 29 Figure 4- A&D- Apex Ecosystem Vision ....................................................................................................... 30 Figure 5- Institutionalisation of the A&D eco system ................................................................................. 31 Figure 6- Summative overview of the A & D ecosystem Masterplan ......................................................... 32 Tables Table 1- Broad categories of contributors to the Aerospace and Defence Masterplan ............................... 1 Table 2- Commitments table ........................................................................................................................ 2 Table 3- Investment options table (0-36 months) ........................................................................................ 6 Table 4- Aerospace and Defence main segments ......................................................................................... 8 Table 5 - Defence allocations to the SDA (ZAR 000,s) ................................................................................. 10 Table 6- Allocations to R&D in Armscor ...................................................................................................... 10 Table 7- Worldwide Airline Industry Forecast (2020-2021) ........................................................................ 11 Table 8- Defence export pipeline in order of readiness ............................................................................. 18 Table 9- Summary -backlog of export orders to be authorised .................................................................. 20 Table 10- Selected South African product sales values .............................................................................. 21 Table 11- A&D sub Value Chains, prioritised .............................................................................................. 24 Table 12- Rooivalk return on investment ................................................................................................... 36 Table 13- Pillar one: Market access ............................................................................................................ 40 Table 14- Pillar two: Localisation ................................................................................................................ 44 Table 15- Pillar three- Increase Industry Competitiveness ........................................................................