GOVERNMENT has hinted that the price of its controversial deal for the acquisition of arms could be higher than R43bn.

While he did not give a figure, Trade and Industry Minister Alec Erwin described the R43bn price yesterday as a "middle-of-the road projection". Erwin was testifying at the public hearing into the strategic defence package in Pretoria.

The public protector, auditor general and National Directorate of Public Prosecutions are conducting the public phase of the investigation into the arms deal.

Erwin denied that cabinet had information on the possible cost escalation of the deal, which, according to a report of the standing committee on public accounts, it failed to disclose. He said that the complex range of risks was investigated and analysed by a committee of ministers, whose departments were involved in the deal.

Erwin said various scenarios of the rand's trajectory, as well as their cost effect, were examined in the risk analysis. He said: "It would have been arbitrary to have identified any one of these as reflecting the rand cost of the package, as opposed to the R30,3bn, calculated at the then exchange rate."

Meanwhile, Auditor-General Shauket Fakie is seeking greater powers like the powers to search and seize, and take statements under oath for his office to do forensic investigations. Fakie said yesterday that, while the collaboration with the public protector and National Directorate of Public Prosecutions in the arms probe was working well, it had not been easy.

He said each of these agencies had different mandates for, and approaches to, conducting investigations, and had to get involved in aspects with which they were not totally familiar.

Defence Minister Mosiuoa Lekota said the contracts of the R43bn arms deal remained valid, amid persistent demands yesterday from the Democratic Alliance (DA) in Parliament for government to withdraw from as much of the deal as possible.

Lekota during debate on his budget vote in the National Assembly and National Council of Provinces insisted that the equipment being purchased in the deal was required by the SA National Defence Force to do its "core business".

Lekota and other ministers have come under increased pressure from the DA and some nongovernmental organisations to withdraw from the elements of the arms deal to which government is not committed because of the estimated cost increases.  

With acknowledgment to Bonile Ngqiyza, Linda Ensor, Wyndham Hartley and Business Day.