Linskoping - Ahead of Deputy President Jacob Zuma formally opening of the production line for SA's order of 28 Gripen fighter aircraft, the main contractor SAAB said yesterday that it had given SA's state-owned defence manufacturer R100m in new manufacturing orders.

Zuma is in Sweden this week to chair meetings of the SA-Sweden binational commission, which oversees and attempts to guide the relationship between the two countries in a wide variety of areas.

By far the largest deal between the two countries is the Gripen programme, under which SA will receive its first fighter in 2006. The programme to supply SA with the Gripen fighters as well as the British Aerospace Systems Hawk fighter trainer involves about 1,5bn in defence industrial participation and $7,2bn in local industrial participation.

The contractors will be required to invest in South African defence and civilian businesses and arrange for a certain amount of SA manufactured exports.

The R100m is part of the planned defence industrial participation programme, and Saab executives say it is a sign that the programme is going according to plan and Denel can meet their high quality standards.

Had Denel not been producing parts according to the contractor's quality standards they would not have been used, they insist. According to a Saab executive, SA's supply of parts used in the Gripen Programme is about 240m. Neither the national treasury nor the contractors has given a recent figure for the supply of the Gripen planes alone.

On his visit to the factory, the deputy president will see SA parts being mated to other sections. The SA parts include the rear fuselage section, the main landing gear fuselage unit and the pylons for carrying missiles, bombs, and reconnaissance sensors on the aircraft. This is the second order SA has received for pylons, which, significantly, are designed to meet North Atlantic Treaty Organisation standards and may mean a larger market.

Until recently certain components of these parts were flown out from Sweden to SA, but with Denel acquiring greater experience in the high-speed machining of parts it is now completing a greater part of the work.

A Gripen International Executive said that the SA value for the Gripen would amount to about 240m. The value for the SA Gripen programme alone remains unknown as government and the contractors give only the combined amount for the fighters and the trainers.

But SAAB says if Denel meets quality standards, SA supplied parts could also be used in Gripen fighters ordered by Sweden and Hungary. Other air forces that are seriously looking at the Gripen and will decide next year are those in Brazil and the Czech Republic. Whether SA parts will be used on these contracts also depends on if these countries have a manufacturing capability to make these.

With acknowledgements to Jonathan Katzenellenbogen and the Business Day.