It is a sign of the fierce competition between five countries to win the Navy's R1,8bn order that John Major had a personal letter hand-delivered to Nelson Mandela last week, report JJ Cornish and Bruce Cameron.

It is a contract which may never be placed, but that is not how groups of high-powered defence salesmen from five different countries have been behaving all week.

A delegation from the giant British electrical group GEC, led by the British high commissioner, Sir Anthony Reeves, marched the corridors of government in Cape Town and Pretoria this week, trying to clinch the biggest military order placed by South Africa for many years : four new corvettes for the South African navy to the tune of some R1,8 billion.

A similar group from Spain left Pretoria on Friday after a series of meetings to punt its 18-part countertrade menu, and lobbying from Germany, France and Denmark - until recently apparently ruled out of the contract - has abruptly stepped up again. Each of the bidders has tried to outdo the others with generous offers of countertrade, some of which - on the face value, at least - are worth far more than the corvettes.

Indeed, a diplomatic source said yesterday that France, Germany and Denmark were all reviewing their proposals and seeking ways to sweeten their offers, given the apparent South African preference for the British and Spanish proposals.

Last week, as part of the lobbying blitz, Sir Anthony delivered a letter from British prime minister John Major to Nelson Mandela in support of his country's bid. It began with a warm "Dear Nelson", and showed clearly just how badly the British government wants to land the contract.

In the past, British governments have been criticised by their own business community for their lukewarm support for contracts of this kind. But not this time : Major pointed out that GEC, the largest British electronics and defence company in the country, which also owns the Yarrow shipyard in Glasgow, was proposing an "imaginative" countertrade package which would create some 22 000 jobs in South Africa and generate contracts worth R3,2 billion.

Part of the package is a proposal that the Glasgow Development Agency build 10 000 houses in the Khayelitsha squatter complex near Cape Town, with full water, sewerage and other facilities. Major wanted Mandela to know that the British government was totally behind the bid.

Spain, the other front-runner, has upped the ante, offering countertrade worth R3,8 billion - twice the value of the corvette order - if South Africa enters into a detailed trade agreement involving a whole series of options, including sales of coal and the purchase of South African materials for use in other ships built at the Bazan shipyard in Cartagena.

But the most attractive item on Spain's extensive menu is the offer to build fishing boats in South Africa, and make some R375 million available to local fishing communities to buy them with.

Free submarine

The French, according to a presentation it made to parliament in Cape Town in November, would throw in a free Daphne-class submarine and build three of the corvettes in Durban, creating 1 700 jobs.

The Germans, who until recently seemed to be out of it, originally offered a package of technological transfers, with a heavy emphasis on the RDP. The other bidders have been puzzled over how they have been let back in, but it emerged this week that deputy president Thabo Mbeki was lobbied on this subject during his European visit in February. Representatives of the German consortium confirmed this week that they had been invited to reopen the bidding process. One unconfirmed rumour has it that Germany has offered to buy the Rooivalk helicopter, which South Africa has desperately been trying to export. "If you buy the helicopter - and it's a damned good one - you can have the corvette order tomorrow," remarked one British official sourly yesterday.

Unfortunately for him, the Royal Air Force, about to place an order for 91 anti-tank helicopters worth some 2 billion, has ruled out the South African version and is negotiating with British Aerospace, Westland - McConnell Douglas and GEC-Bell over their more sophisticated machines.

The British flew out last weekend in the belief that the decision was now between them and the Spaniards, and would be made this week. To their consternation, the situation has changed yet again. A cabinet decision has been postponed for another two weeks at least, and the argument within the ANC is not over which country should get the order, but whether the order should be placed at all.

"Quite frankly, the last thing South Africa needs is four new gunboats," said one participant disdainfully, adding : "The military have hijacked this discussion."

Ministers and senior ANC members opposed to the deal have been angered by what they consider to be phoney economics used by the military establishment to press its case. A closed door briefing of MI's last week did little, if anything, to drum up support for the purchase of corvettes, with a growing number of MP's wondering why South Africa needs them. "If the deal is so good, we shouldn't be buying only four corvettes," one MP remarked afterwards. "We should buy a whole fleet."

Government sources said yesterday that even if the cabinet did go against the majority of ANC MP's on the issue, the whole bidding process would be thrown open yet again. The military budget, which at one stage in the PW Botha years accounted for almost 20 percent of government spending, has been targeted as the main area from which funds can be diverted to social spending.

This year the South African Defence Force was allocated R9,8 billion, or 6,5 percent of the total budget of R152 billion. It has since managed to win another R700 million.

MP's are not completely opposed to spending money on the armed forces.

Even those, such as Gill Marcus, chairperson of the influential parliamentary finance committee, who have opposed the deal acknowledge that if South Africa is to retain a defence force, it should be effective. It is the nature of this capability that is being debated.

In this regard, it is being pointed out that South Africa is the 12th largest maritime nation on earth, with a R1 billion-a-year fishing industry employing 100 000 people who need protection from - among others - the Spanish fishing fleets.

With acknowledgements to JJ Cornish, Bruce Cameron and the Business Report.