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Paramount Group acquires Nautic Africa


www.defenceweb.com

Written by Dean Wingrin, Friday, 08 November 2013

Paramount Group, Africa’s largest privately owned defence and aerospace company, has acquired a majority stake in Cape Town-based specialist ship building company Nautic Africa.

Nautic Africa, started by CEO James Fisher, was established in 2008 and is a provider of speciality high-speed, ballistic protected aluminium patrol vessels, mainly to the military, Coast Guard and oil and gas communities.

Whilst the Paramount Group has its roots in the land forces environment, it recently moved into the aerospace sector with the acquisition of ATE (Advanced Technology and Engineering, now Paramount Advanced Technologies) early this year.

Ivor Ichikowitz, Executive Chairman of Paramount Group, noted his company had been looking to move into the maritime arena and that starting from scratch was not viable. “The acquisition of Nautic Africa,” Ichikowitz explained, “is the last piece of the puzzle to supply customers with complete solutions in the maritime environment.”

Ichikowitz observed that one of the biggest threats facing Africa is not coming from the land or the air, but from the sea in the form of piracy, theft of marine resources and drug trafficking.

The deal to acquire Nautic Africa was put together in early 2013, but the formal announcement was only made at a ceremony at the Nautic Africa facility in Table Bay Harbour on Thursday. Fisher will retain a significant minority interest in the company. It is envisaged Nautic’s current workforce of 100 will double to 200 by 2015.

The acquisition, Ichikowitz said, will combine Paramount’s global market reach and strong track record in Africa with the engineering and design skills of Nautic Africa. This, he continued, will stimulate global demand for Africa’s naval solutions.

Fisher noted that Paramount would bring strength to Nautic Africa. “It brings us pedigree, they will assist in growing to the next step,” said.

Importantly, the ship builder will be able to leverage off Paramount to strengthen their systems and administrative support, as well as gaining access to markets they could not easily access before.

Nautic Africa recently concluded an R600 million deal to build seven 35 metre multi-role patrol vessels for West African clients and is actively working on new orders. The acquisition will further create jobs in the maritime industry as well as the general defence and systems industry.

Due to the growth of the company, Nautic Africa is not only looking to expand its dockyard and ship building facilities in Table Bay Harbour, but may also create a new facility at Saldanha Bay.

The South African Navy (SAN) has expressed a desire for a strong local maritime industry and Fisher is interested in pursuing relationships with the SAN. In order to grow its capabilities, Nautic Africa have partnered with DCNS of France for Project Biro, the acquisition of Offshore Patrol Vessels (OPV). Austal of Australia has also expressed interest in partnering with the Cape company.

Besides the actual building of vessels, Nautic Africa is also looking to growing its leasing business.

As a result of the acquisition, a two brand strategy has been implemented. The Nautic Africa brand will continue to be used for commercial activities, whilst military markets will use the new Paramount Naval Systems brand.

Malawi president dissolves cabinet in wake of graft scandal


Defenceweb.com

Malawi President Joyce Banda dissolved the cabinet on Thursday after police arrested several junior officials in her government in recent weeks on suspicion of stealing state funds.

The presidency of the southern African state said in a statement that Banda, who came to office in April 2012, “will announce a new cabinet in due course.” It did not elaborate.

The presidency had said on Wednesday that Banda would meet her cabinet the following day to discuss the financial scandal and who was responsible.

It did not disclose details of Thursday’s meeting, but a senior government official, who asked not to be named, said Banda told the cabinet that she had “lost faith” in them.

The scandal, known locally as “cash-gate”, forced the government to shut down its payment system last week so that it could investigate over $4 million that went missing, delaying the payment of salaries to teachers, nurses and doctors.

Banda, who faces an election next year, has won acclaim in the West for austerity measures and moves to bolster the economy of the aid-dependent, impoverished country.

But steps such as an IMF-backed devaluation of the kwacha currency have stoked inflation, raised the price of food for the rural poor and eroded Banda’s domestic support.

The police said that about 10 junior government officials had been arrested so far for suspected graft, and that they had recovered tens of thousands of dollars in cash from their car boots and homes.

A small group of protesters marched in the capital Lilongwe on Thursday and delivered a petition calling for the sacking of top officials, including Finance Minister Ken Lipenga, over the scandal. Lipenga has denied any wrongdoing. He was not immediately available for comment on Thursday.

Last week, envoys from eight Western donor nations, whose aid traditionally has accounted for about 40 percent of the state budget, asked Banda to deal with the alleged corruption at the treasury and investigate an attack on the budget director.

“These are worrying developments that potentially risk Malawi’s stability, rule of law and reputation,” the envoys said in a statement.

Budget director Paul Mphwiyo was shot last month, but survived the attack.

After the shooting, the government’s Anti-Corruption Bureau and police launched an investigation into the budget director and unnamed ministers over suspected graft, indicating the scandal extended beyond just a few junior officials.

“People have lost confidence in (Banda’s) leadership and the best thing she can do is to order the arrest of senior officials involved and ask her finance minister to resign,” Lazarus Chakwera, leader of the opposition MCP, said at a public rally over the weekend.

Malawi’s troubled economy has shown signs of improvement in the past few months with inflation that was once running over 30 percent easing slightly, while earnings from its main export tobacco are expected to double this year from 2012.

South Africa: Transnet finds R6bn in irregular pipeline spending


Mail&Guardian Online

By Lynne Donnely

March 16, 2012

Irregular expenditure on contracts relating to Transnet’s new multi-product pipeline amounted to an estimated R6.2-billion, it was revealed in Parliament this week. 

At a hearing by Parliament’s standing committee on public accounts (Scopa) the parastatal revealed that two contracts for engineering, procurement and contract management services on the controversial pipeline contributed a major share of the total of R8.3-billion of irregular expenditure disclosed in the company’s 2011 annual report.
The pipeline has been fraught with controversy because of delays and cost escalations, which increased from the originally budgeted R9.5-billion in 2006 to R23.4-billion now.
Full completion was intended for the first quarter of 2011 but was delayed until 2013, although certain sections have since become operational.
Rising costs and time delays prompted Public Enterprises Minister Malusi Gigaba to launch an independent review of the project.
The review, which is expected to be released next week, included three independent reports on the governance, engineering and project management aspects of the pipeline, as well as an independent legal opinion.

Pipeline tariffs affect petrol prices
The increases have also had an impact on pipeline tariffs as costs for the infrastructure are recouped. This in turn has an impact on petrol prices for South African commuters.
On Thursday the National Energy Regulator of South Africa announced a 22% increase in the pipeline tariff, which is expected to cause a 4c per litre hike in the petrol price.
The company’s acting chief financial officer, Anoj Singh, told Scopa that three contracts for procurement and management services totalling R6.57-billion were deemed irregular.Of these, one contract for services valued at about R300-million was unrelated to the pipeline. The contracts had been concluded in 2004-2005 and 2006-2007.

He said, however, that in all three cases Transnet had received value for money on the contracts, even though procurement procedures had not been complied with.

For this reason, the contracts were not classified as fruitless or wasteful expenditure.

Contracts awarded without following procedure
The first contract for the pipeline was awarded after an individual without the delegated authority signed the agreement. The second was deemed irregular after it was found that internal policies and procedures had not been followed because internal controls in awarding the contract were not applied. But this was in the first stages of the pipeline project, said Singh, and contributed the smallest amount to the combined pipeline irregular-expenditure total of R6.57-billion. He could not tell the committee the individual worth of pipeline-related contracts…Read more.

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