The full air defence package could cost R2bn-R3bn over the next 10 years. The current phase of the acquisition is already the largest defence purchase in play outside the expensive strategic weapons package. But the air defence system should not be as vulnerable to currency pressures as the larger weapons package, because many of the larger missiles and radar system components are, or could be, made in SA.

The air defence system is a three-phase programme planned for the next 10 years. The contract under consideration is the first of these phases. The system is essential if the army is to have a nucleus of modern air defence capability, says Jane's Defence Weekly correspondent Helmoed-Röömer Heitman.

Similar reasoning lies behind the larger strategic defence package, which became embroiled in controversy - first because of corruption claims, largely set aside by government-appointed investigators, and secondly because of its rising cost.

At the current rand-dollar rate, the package will cost about twice the R30,05bn initially estimated in December 1999. Civic pressure groups and even business leaders have urged government to cut back on arms spending. The activist body Economists Allied for Arms Production is leading a class action suit to have the strategic defence package declared unconstitutional.

The debate inevitably returns to why SA needs a Defence Force at all. The fact is that unless the Defence Force continually upgrades and restocks its military hardware, it will be doomed to decline: you either have a well-equipped military or dispense with it altogether.

The air defence system is especially important to SA's future military needs, including peacekeeping, says Heitman. He notes that both Zimbabwe and Angola use fighters and helicopters against the rebels in the Democratic Republic of the Congo, where SA forces are deployed in peacekeeping. "If things turn sour there, those aircraft could be used against peacekeepers, too," says Heitman. "The guy who controls the air tends to own you."

The first phase of the air defence system consists of an integrated battery of about nine man-portable launchers and at least 100 missiles which could cost up to R400m, according to a source familiar with the tender. Armscor's tender for the battery closed on December 3 last year, almost exactly one year after the request for proposal was first issued. The tender was first extended by a month, and then the request for proposal was reissued to give the bidding companies more time to comply with the technical requirements of the contract.

It is believed only one consolidated bid for the contract was submitted. This was by a consortium of some of SA's largest defence companies with British-owned BAE Systems and Thales of France. Key local players in the consortium are State-owned defence manufacturer Denel (soon to be part-owned by BAE Systems), electronics and systems engineering company African Defence Systems (ADS, owned by Thales), and Reutech Radar Systems, part of the Reunert group, which has already supplied the Defence Force with a radar-artillery command system, Kameelperd, that will be an integral part of the new air defence system. ADS and Denel initially competed for the contract, but Armscor persuaded them to join forces.

The army has specified a pedestal-mounted very short-range air defence missile system with a range of up to 6 km linked to a local warning control post, radar or optronic. All modules must be man-portable and able to be dropped from the air. The system must also be suitable for mounting in an armoured vehicle. Its purpose would be to detect and counter-attack enemy aircraft. The portability of the system would extend its use from home-based defence to defence of SA forces in peacekeeping missions abroad, says an industry-based air defence specialist.

The bid is under evaluation by a procurement board, and the contract is expected to be awarded by April. The army wants the system to be operational before the end of 2003.

The second and third phases of the wider ground-based air defence system will include a short-range missile system with a 20 km range and a 10 000 m altitude, probably using the Umkhonto missile developed by Denel's Kentron division, and integration of existing anti-aircraft guns with Reutech Radar Systems' Kameelperd radar/artillery command post.

With acknowledgement to Peter Honey and Financial Mail.