The multi-billion-rand arms acquisition programme flew into heavy weather as Parliament's public accounts committe quizzed defence bosses about irregularities in the handling of the deal. 

The hearings yesterday followed Auditor-General Shauket Fakie's special report to Parliament, which found that generally accepted procurement practices were not followed. Mr Fakie also recommended a special forensic audit into the subcontracts of the deal, some of which have been the subject of corruption claims.

Concern was expressed yesterday about the handling of the conflict of interest involving Department of Defence acquisition head Chippy Shaik, who withdrew from the process because of the involvement of his brother in a successful bidding company. African National Congress committee member Andrew Feinstein said it was "extraordinary" that conflicts of interest in a matter involving R30-billion were dealt with in an informal manner.

"I also find it worrying that there is one case at least of conflict of interest, that a person actually participated in a discussion around that particular issue .. We do not have an unequivocal negative that there could have been any other conflicts of interest," he said. Committe members also expressed surprise that the department could not provide a final estimate of the cost of the deal. Mr Shaik said that with inflation and exchange rate costs, it would cost R43,8 billion over 12 years. This figure would increase once the finance costs from banking loans taken by the Department of Finance were included.

ANC member Laloo Chiba said it was unacceptable that the department could not provide final estimates and demanded a detailed projection be provided within seven days. He also demanded an explanation for a discrepancy of R300-million in the initial costs estimate provided.

Another disappointment had been that offset benefits to the economy could fall short of initial expectations. When the main details of the deal were announced, it was said that it would provide investment in South Africa of R104-billion and more than 65 000 jobs.

With acknowledgement to Parliamentary Bureau, Sapa and the Cape Argus.