By Mr A. Visser Chief Director Strategic Management

1. PRESENTATION TO PORTFOLIO COMMITTEE ON DEFENCE DOD STRATEGIC BUSINESS PLAN FY2005/06 By Mr A. Visser Chief Director Strategic Management 15 March 2005 DOD

2. AIM To brief the PCD/JSCD on the DOD Strategic Business Plan for FY05/06 before it is tabled in Parliament in April 2005 DOD

3. SCOPE • Timelines • Background • DOD Programmes • Risks per Programme • Options for Funding • Discussion DOD

4. TIMELINES DOD

5. Cycles vs. Financial Years Legend: 0 = Year of Expenditure 0-1= One Year prior to Year of Expenditure 0-2 = Two Years prior to Year of Expenditure 0+1 = One Year after Year of Expenditure

6. PLANNING CYCLE - EXAMPLES

7. BACKGROUND • The earliest draft DOD Strategic Business Plan FY05/06 was presented to the Portfolio Committee on Defence on 01 Feb 05. • Plan was presented to and approved by the Defence Staff Council (DSC) on 23 Feb 05. • DOD Budget presented to Portfolio Committee on Defence on 08 Mar 05 • Plan will be tabled in Parliament on 08 Apr 05. • Programme Structure remains generally the same, except Force Employment (formerly called Command & Control - Joint Ops) DOD

8. Background… • Focus: • Conclusion of the First Decade of Democracy • First Year of Second Decade of Democracy • Progress on Strategic Defence Package (SDP) weapon systems • Overview by the SecDef & CSANDF separate. • Reference to Parys Resolutions (Strategic Decisions), including new DOD Vision & Defence Update • Minister of Defence’s Strategic Guidelines • Defence Strategy is still in process • Plan is in process of being printed DOD

9. DOD PROGRAMMES DOD

10. RISKS PER PROGRAMME

11. RISKS PER PROGRAMME

12. RISKS PER PROGRAMME

13. RISKS PER PROGRAMME

14. FUNDING OF RISKS FY2005/06 DOD

15. BACKGROUND • 316 Risks listed in SBPs • 76 Identified as DOD risks • 37 Identified as critical • 14 Options based on 37 risks developed • Options prioritised and top 4 selected • Presented to MTEC • Partially funded by NT DOD

16. NATIONAL TREASURY FUNDING

17. IMPLICATIONS • Ammunition Disposal – Lack of safety of depots and personnel due to unstable ammunition. • Maintenance of Facilities - Non-compliance with Occupational Health and Safety Act, which may result in closure of facilities. • Integration of SDPs – SDP vessels not fully accepted to design specifications. • Health Legislation – Cannot comply with pharmaceutical regulations and building of depots. DOD

18. OPTIONS NOT FUNDED • DFR – MA Alignment (RM28) • SAAF – Inkwazi (RM20) • Spec Forces – Recruiting and equipping (RM6) • SA Army – MSDS (RM107) • SA Army – Ammo stock levels (RM93 or RM332) • SA Navy – Compliance with stat prescripts (RM80) • SAAF – Air base infrastructure (RM157) • MLS – Pers retention (RM8) • SAAF – YPT runway (RM25) DOD

19. REQUIREMENTS: MTEF 2005/06 • Additional RM183, RM254 and RM288 provided by NT. • Four options developed

20. ALLOCATIONS 05/06

21. INTERNAL FUNDING DOD

22. OPTION 1 - AMMUNITION DISPOSAL Additional Funding of Rm5 to be utilised as follows: • Registration of project for Disposal Plant • Disposal of critically unstable ammo iaw approved disposal plan • Preparation of dilapidated demolition ranges and capabilities The ammunition will be disposed of through conventional methods at approved demolition ranges. However, in the continued absence of a dedicated Disposal Plant the serious risks at Jan Kemp Dorp and De Aar still remain

23. OPTION 2 - FACILITIES Additional Funding of Rm10 to be utilised as follows: • Priorities were indicated to National Department of Public Works (NDPW) • NDPW will propose options to DOD in April 2005 • DOD will then instruct NDPW on utilisation of funds The following risks still remain: • Lack of operational readiness and service delivery • Possible closure of units due to Occupational Health and Safety Act • Low morale due to unsafe and unsatisfactory working conditions

24. OPTION 3 - INTEGRATION OF SDPs (SA Navy) Additional Funding of Rm26 to be utilised as follows: Corvettes • Support contracts Rm1 • Qualification and acceptance trials Rm10 • Running costs Rm5,5 • Facility upgrades Rm3,5 Submarines • Additional spares and support equipment Rm2,5 • Support contracts Rm3,5 Total Rm26 Balance of risks to be managed through Risk Abatement Plan

25. RISK ABATEMENT PLAN • Operational units at lower levels of readiness • Disposal sale of OTQ (RM 50) to operating budget • Strict discipline with ammo and fuel usage • Non-replacement of missiles fired • Re-phasing of activities

26. OPTION 4 - HEALTH LEGISLATION Additional Funding of Rm20 to be utilised as follows: • Changes to the Medical Health Depot to comply with the Pharmacy Act – Rm10 • Changes to pharmacies to comply with the Pharmacy Act – Rm10 The following risks still remain: • Depot not fully compliant with legislation • Shortage of ambulances and vehicles required for clinical care • Non-replacement of main medical equipment (Sonars, X-rays, scanners, etc) • Security at facilities These risks will be mitigated to some extent through internal reprioritisation

27. SUMMARY • Alignment with Government Priorities (Ten-Year Review and SONA) • Maintenance of the SANDF core capabilities • Strategic Defence Packages (Integration into SANDF) • Peace Support Operations(Support Govt Initiatives and ASF) • Departmental Risks(37 risks -14 Options- 4 funded by NT) • Strategic Decisions (Parys Resolutions) DOD

28. DISCUSSION DOD