South Africa's controversial multi-billion rand arms deal package, which was negotiated by the government a few years ago, is beginning to pay off with the announcement this week by a Swedish aerospace and technology group it would sign a R100 million new manufacturing contract with Denel.

The contract, which is part of the spin-off from the strategic defence procurement programme for Denel aviation, will see Denel supplying the Swedish-based company Saab with various manufacturing components for the Gripen fighter jets .

The announcement by the Swedish group of the R100 million contract as part of the industrial participation for South Africa will see the creation of employment for hundreds of people in the country as engineers, technicians and pilots begin their training in various ca pacities in Sweden.

The controversial arms deal, which pitted government against the opposition and pressure groups who questioned its benefit to the country, will see the country's defence undergoing a major overhaul as a result of the purchase of new fighter jets and naval warships.

The jet fleet for the South Africa Air Force will involve the acquisition of 24 Hawk lead-in fighter trainers and 28 Gripen swing-role fighter jets.

The new aircraft, which will be delivered between 2006 and 2012, are expected to enable the South African Air Force to cut its jet trainer and fast-jet fleet inventory by 75 percent without diminishing any of its mission capabilities.

The contract will also see Denel manufacturing 60 sets, about 240 units in total, of Nato-standard weapons/stores pylons. These are the under- wing stubs on which missiles, reconnaissance and other equipment are carried.

The first phase of the manufacture of the Gripen fighter planes began this week at the manufacturing plant of Saab with the arrival of 29 landing gears assembled by Denel and shipped to Sweden. Saab executive director Kjell Moller said the company was pleased with Denel's quality of manufacturing components .

Moller said the Saab-Denel contract was a further demon stration of how government's strategic defence procurement programme was succeeding in integrating South Africa's high technology manufacturing base into worldwide markets.

In terms of the industrial participation programme, Denel's contract with Saab covers the production and supply of rear fuselage sections, main landing gear fuselage units and Nato-interoperable store pylons for the Gripen. It will also cover the supply of detailed tooling required for the component orders.

With acknowledgements to Jimmy Seepe and the City Press.