The Scorpions are set to strike again with more arrests today in connection with fraud and corruption in the controversial arms deal, the cost of which is now officially estimated at nearly R70-billion.

National Director of Public Prosecutions Bulelani Ngcuka briefed MPs yesterday that government officials had been involved in situations where there was a conflict of interest and we will be taking action within the next 24 hours.

And that probably means that defence department chief of acquisitions Chippy Shaik, who came in for heavy criticism when the joint investigation report into the arms deal was tabled in Parliament earlier yesterday, will be arrested.

On how many officials faced action and whether Mr Shaik was among them, Mr Ngcuka said yesterday "My lips are sealed. I don't know. Let's wait for tomorrow.

The report said there was a conflict of interestbetween the position Mr Shaik held and the role he played by virtue of his brother Shabir Shaik's interests in the Thomson Group and African Defence Systems.

These companies won contracts for combat suites - an electronic combat control system - on the corvettes.

The report states that Mr Shaik did declare this conflict of interest in December, 1998, to the project control board, but continued to take part in the process that led to the ultimate awarding of contracts to these companies. He did not recuse himself properly.

It also noted that the investigation had uncovered that Mr Shaik "had not applied for and did not receive the military security clearances required by law".

The Scorpions may also be knocking on the door of Rear-Admiral Johnny Kamerman who the report effectively accused of lying over a critically important meeting on combat suites for the corvettes.

The rear-admiral is currently in Germany where he serves as co-ordinator for the construction of the submarines and corvettes.

The report found there was no evidence of "any improper or unlawful conduct by the government, or grounds to suggest its contracting position is flawed".

But ailing former defence minister Joe Modise, while cleared of accepting a bribe, is not off the hook yet.

The report says that other allegations against Mr Modise, suffering from cancer, have not yet been investigated.

Mr Ngcuka told media yesterday that there were "other aspects" that needed to be investigated.

The 380-page report dealt with allegations of corruption in the awarding last year of fighter, helicopter, corvette and submarine contracts to companies in Germany, Italy, Sweden, Britain, France and South Africa.

They include Sweden's Saab, Britain's BAE Systems and France's Thomson-CSF.

The report said it was impossible to put an accurate rand value on the deal in the light of currency fluctuations, but said financing charges would amount to about 48 per cent of the $4,7-billion basic price.

At current rand values, the total cost would be $6,96-billion or R66,7-billion.

Earlier, Mr Ngcuka told MPs there was evidently a need for legislative measures to address situations where conflict of interest might amount to a breach of duty, and to regulate the post-employment activities of officials.

However, the perception of widespread corruption within government was unjustified.

"While there may be certain individuals and department officials who used their positions improperly within government departments, parastatal bodies and in their private capacity to derive some form of benefit from the acquisition process "which may render them criminally liable" the integrity of the government and its institutions is unquestionable.

The investigating team recommended parliament should take urgent steps to ensure high-ranking officials and office-bearers, such as ministers and deputy ministers, were not allowed to be involved -- whether personally or as a private enterprise, and for a reasonable period of time after they leave public office -- in contracts that are concluded with the state.

The report is particularly critical of the way in which the corvette procurement was handled, noting that with the exception of Spanish company Bazan "all the bidders involved in the corvette procurement programme failed to comply with the minimum evaluation criteria in respect of financing, technical requirements and defence industrial participation (DIP)".

The decision to allow bidders for the corvette programme to supply information after the offers were submitted constituted a deviation from proper procurement practice.

The report also found a number of irregularities with regard to the awarding of the tender for the submarines.

However, it was held that there was no evidence to suggest that any individuals influenced the selection process.

It concluded with regard to all the contracts that so far no evidence has emerged to suggest that (any) activities affected the selection of the successful contractors/bidders that may render the contracts questionable.

The report has been referred to a number of committees, including finance, the ethics committee and standing committee on public accounts.

They will examine it and report back by the end of the first week of December.

With acknowledgement to Patrick Cull and The Herald.