Deep Silence On Submarine Offset Jobs*

The German Submarine Consortium has declined to reveal details of its nondefence offset projects which form part of government's arms procurement deal.

The offset projects were reported to have been established in 2001.

Attempts to obtain information from the trade and industry department about what the projects are and how they have advanced have also been unsuccessful.

"The department cannot comment on the issue as these are commercial projects," a department spokesman said yesterday.

The consortium was reported to have 10 nondefence offset projects in the department's six-monthly review of national industrial participation offset projects, released last month.

The document was supposed to provide " a detailed report on actual projects that have been facilitated".

Three of the 10 projects were reported to have started in 2001. These include a flori/agriculture project that has reportedly generated 1500 jobs in Western and Eastern Cape.

The others are a stainless steel pipes project and an engineering services project in Gauteng.

The consortium declined to provide Business Day with contact numbers, to interview project participants, or to provide any details of these projects.

The South African office of the lead company in the consortium, Ferrostaal, also declined to talk about the projects.

Meanwhile, one of the projects included on the list of 10 , a cold- rolling mill planned for Eastern Cape, has been scrapped. Government confirmed this earlier.

There were also doubts that a condom manufacturing plant in the East London industrial development zone would go ahead. The main participant, Condomi of Germany, has been reviewing the project for several months. The government report states that the venture would generate 520 jobs.

Four of the projects would start this year, according to the report, while a special steel products project was under discussion.

In terms of its contract with government for the supply of submarines, the consortium is obliged to create economic benefits in nondefence projects worth à 2,85bn during the lifetime of the submarine procurement programme through investments, exports, and skills and technology transfers.

There would be little incentive for any of the equipment suppliers to renege on their commitments, as they would have to pay hefty penalties in terms of the contracts .

However, the secrecy raises questions as to whether the projects have had the intended benefits and whether they do exist.

With acknowledgements to Carli Lourens and the Business Day.

* Sounds very familiar - R.M. Young, 2003-07-31