Much progress had been made in achieving the offset targets required by the R53bn arms deal, and these were well ahead of schedule in terms of the 2004 benchmarks, Trade and Industry Minister Alec Erwin told parliament yesterday during a debate on the arms procurement package.

Parliament adopted the reports of the different committees on the arms probe report, with the Democratic Alliance voting against the report, and some Inkatha Freedom Party members abstaining.

Trade and industry portfolio committee chairman Rob Davies noted that by the end of last year 70 projects had created 2 000 direct jobs of the 15 000 projected during the total contract period. Approved projects are forecast to generate export and investments to the value of more than $6bn over an 11-year period, compared with the 2003/04 milestone of $4bn in investments and exports actually achieved.

Erwin said: "We believe that the range and quality of projects that have come in do meet our objective to use any major purchase by the public sector to support and strengthen the industrialisation process in SA and its manufacturing capacity."

He dismissed the argument that many of the investments would have come to SA anyway, saying this was not necessarily the case, given the highly competitive global investment environment.

Sometimes it was necessary to substitute projects to adjust to market conditions, but this did not lessen suppliers' industrial participation obligations.

Legal advice confirmed that the performance guarantees included in the contracts were the most effective that the government could get, and were in line with best practice internationally.

With acknowledgement to Linda Ensor and Business Day.