The inquiry into SA's controversial arms deal goes into day two of witness testimony today and further scrutiny of the information released yesterday by Admiral Keg Verster of the Department of Defence is expected when his colleagues step up to present evidence.

Verster's testimony provided detailed information on the policies and processes to which arms acquisitions are subject.

He revealed during cross examination that, despite what looked like an elaborate web of mechanisms to block out irregularities, there was a policy gap in terms of bidders declaring interest.

In the years that he has worked at the Defence Department, "declaration of interest was never made except at the Armscor Board," Verster said.

He said that in terms of procedures, "it is a moral obligation that sparks declaration of interest and not policy."

Chippy Shaik

One of the issues under investigation is the conflict of interest regarding Chippy Shaik, the Defence Department's Head of Acquisitions.

Shaik failed to declare his interest prior to the bidding process in which African Defence Systems, a company belonging to his brother Shabir Shaik, acquired a primary contract.

Verster explained that the absence of a clear policy on such a declaration of interest was due to the fact that in the past, arms acquisitions were the sole responsibility of Armscor while the government did not get involved as is its current practice.

Previously, the task of selecting arms suppliers was left entirely up to Armscor.

Verster, who reports to Shaik, told the Commission that "the personal contribution by Chippy Shaik to the strategic defence programme is laudable".

In cross questioning, Verster was asked what steps the Defence Department had taken to ensure that the process was not partial.

He responded: "It was difficult for partiality to play a big role". Verster said that there were so many processes that anyone trying to be partial would have to have swayed a string of individuals from a number of different structural levels over to his side.

Asked whether it was impossible for partiality to enter the acquisition process, he said: "Not impossible but very unlikely".

Verster said that there was no overarching authority or single person responsible for ensuring that there was no partiality or irregularities. Instead, each level would make separate checks on a number of technical, financial and policy issues.

On the question of the price of the arms package, Verster said that the price of R30,3-billion was given based on 1998 rates. Although the exchange rates continued to change, the figure was not adjusted at the time as the negotiations were continuing and it would have caused difficulties with the contracts.

Verster concluded his testimony by saying that SA should steer away from multi-project defence acquisitions because such a programme is difficult to manage. He said that future arms acquisitions should be done one at a time and the bigger projects should be staggered.

With acknowledgement Shareen at NewsStream - Johnnic's Online News Desk and Business Day.