A decade ago British Aerospace teetered on the brink of bankruptcy. It was saved from oblivion by former British prime minister Margaret Thatcher who, while still in office, negotiated the notoriously corrupt £20bn Al Yamamah arms deal with Saudi Arabia.

The fortunes of British Aerospace, now renamed BAE Systems, soared. It became the world's second-largest armaments company, second only to the even more notoriously corrupt Lockheed Martin.

BAE Systems has just announced a half-year financial loss of £63m (UK armaments group's shares bomb out badly, September 13). Might its new agenda be: so let's stoke up a major war in Iraq, irrespective of how many people we kill in our obscene pursuit of profit-atany-cost?

Sadly for us, Britain's Tony Blair, Germany's Helmut Kohl and Thabo Mbeki cooked up another deal. The Germans would get the warship contracts and BAE Systems would get the warplane contracts. It was touted as a "Marshall Plan" for post-apartheid, newly democratic SA.

Spend R30bn on armaments, and the Europeans would invest R110bn back in offsets to create 64 165 jobs. It was "a free lunch", or so we were told. Denel has announced yet another loss of R363m for the year 2001/2002.

The arms deal dismally fails constitutional requirements that government procurements must be "fair, equitable, transparent, competitive and cost- effective." Even the whitewashed arms deal report found the tendering procedures to be riddled by malpractices.

What now? The cost of the arms deal has rocketed from R30bn to R53bn, but the offsets have fizzled. The stainless steel plant offset for three German submarines has morphed into a condom factory. And BAE Systems is now pushing "Taxi" a kind of chewing tobacco banned in Europe because of fears of cancer.

Cancelling the arms deal as constitutionally unlawful will place the financial consequences on British and German taxpayers. They, hopefully, will finally question why their governments are so beholden to the arms industry. Perhaps the African National Congress leadership will also consider the increasingly angry ANC voters, 62% of whom want the arms cancelled, 19% want it cut and of whom only 12% support it.

Could Mbeki really have thought SA's future prosperity rested on exporting arms to countries such as Algeria, India and Pakistan, or fuelling conflicts in Africa and the Middle East? Will he have the courage to admit he was conned?

With acknowledgements to Terry Crawford-Browne and Business Day.