An army of investigators could be mobilised to probe R30 billion deals.

Government's "R30 billion" arms deals may well face a series of much wider-ranging probes than the forensic audit requested by Shauket Fakie, the auditor-general. 

The Heath commission, the office of serious economic offences and other official bodies could be called in. Parliament's watchdog public accounts committee has demanded that numerous documents be delivered to it by Tuesday so that it can decide on the scale of the likely investigation and which organisations should be involved.

Members of the public have provided the committee with new information about the deals since Wednesday's hearing, at which it emerged that the government would have to spend at least 50 percent more than the R30 billion originally announced for the purchase of new aircraft and naval vessels.

The other big surprise to come out of Wednesday's hearing was that only R3 billion in industrial benefits had been guaranteed by the suppliers. When the deals were announced last year, the public was told that industrial offset activity would amount to R110 billion, creating an estimated 65 000 new jobs. Negotiators argued this week that it was standard practice to guarantee only five to 10 percent of an arms contract's value in offset benefits. But they added that the potential international embarrassment to suppliers that did not meet offset expectations was an added protection.

In the hearing, Jayendra Naidoo, the government's chief negotiator on the acquisitions, surprised MPs by saying the offset benefits should be understood as a means of managing the risks inherent in such large deals and not as a growth exercise. "The idea that industrial participation is a development path is a highly questionable proposition," Naidoo said. "It is an exercise to obtain a neutral impact, rather than a generator of an economic boom."

The committee was told that the cost of the contracts had subsequently ballooned to R43,8 billion with inflation and exchange rates taken into account. The rand's plunge this week makes even that figure appear conservative now. Naidoo's revised figure also does not include finance charges, which are likely to add billions more to costs during the 12-year life of the acquisition programme. Experience elsewhere suggest that initial budgets for high-tech arms often escalate dramatically after a deal is signed. It has been suggested that South African taxpayers could end up footing a bill of R60 billion or more.

Incredulous ANC MPs this week took the lead in questioning generals, admirals and government negotiators about whether the cabinet had been properly informed about the full cost. In particular they wanted to know whether projected cost escalations had been accounted for at the time the decision to award the contracts was taken.

The chairperson of the public accounts committee, Gavin Woods, said yesterday he was considering a proposal that the deals be probed not only the auditor-general, but also by the Heath commission, which investigates official corruption, the public protector, the office of serious economic offences "and others".

"This investigation may need a combination of skills," Woods said. All contracts signed as part of the acquisition programme contain clauses saying that if bribery is discovered, a contract becomes null and void.

With acknowledgement to John Matisonn and the Sunday Independent.