Cape Town - About 6543 direct jobs have been created in 74 confirmed national industrial participation projects, trade and industry deputy director-general Lionel October said yesterday.

Of the 74 projects, 50 approved and implemented projects related to the strategic arms procurement package.

There has been some concern over whether the arms deal would have the job-creating and investment spinoffs that were promised. Successful bidders had to commit themselves to making investments, and achieving certain sales and export targets.

October said that if all the projects in the pipeline came to fruition, about 9000 direct jobs would be created out of the 14900 that had been promised.

The department was comfortable about the progress made and optimistic about the future prospects. The portfolio of industrial participation projects was "robust and diversified", with a wide geographic spread.

The bulk of the industrial participation projects were non-defence ones, which would have technical transfer spinoffs.

He said that 10% of the total obligations had been fulfilled.

The total obligation of the defence contractors was $14bn, and it was expected that $3,4bn in credits would have been accumulated by the end of 2004.

The obligations relate not only to investments but also to sales and exports generated by sustainable and viable businesses.

Most of the industrial participation projects not related to defence relate to the acquisition of aircraft by SAA, as well as large purchases made by Telkom and Eskom which had industrial participation obligations attached to them.

The obligations for the defence package will have to continue until 2011.

October said the first two years involved a process of finalisation and consolidation of the projects, which covered a range of industries from engineering, aerospace, metals and minerals and beneficiation.

The BAE/Saab consortium, which carried 50% of all defence obligations, was involved in 27 investment and export promotion projects, which were expected to generate $2bn in service and export credits by the end of 2004.

The investments had created about 4000 direct jobs.

Another contractor, Agusta, was engaged in a feasibility study to establish a smelter near Saldanha Bay in a joint venture with an Italian company, Novamet, an SA firm, the Industrial Development Corporation and Eskom.

Projects of contractor Thyssen were forecast to generate exports and investment of $1,6bn over the period of the contract.

With acknowledgements to Linda Ensor and the Business Day.