SA cannot pull out of controversial arms deal, says minister

The South African government cannot legally pull out of the R43-billion arms procurement deal even if corruption in the process is detected *1, Trade and Industry Minister Alec Erwin said on Friday.

Speaking after a press conference at which he, Defence Minister Mosiuoa Lekota, Finance Minister Trevor Manuel and Public Enterprises Minister Jeff Radebe dismissed growing allegations that the process was flawed and corrupt, Erwin said the government "cannot legally go back on the deal".

He said the government was, however, "absolutely confident" that there was no corruption involved and would implement all contractual obligations. The government could not be held responsible for any fraudulent activity between its prime contractors and the companies they had sub-contracted *2, Erwin said.

"That is a criminal matter or open for civil litigation. However, even if there is corruption between the contractor and sub-contractors, it is not a reflection that the procurement process is corrupt," he said.

"But we are quite happy with it. It is a good deal and we will be very surprised if anything untoward came up." The ministers said earlier that the government recognised that the auditor-general and Parliament's public accounts committee wanted the deal to be investigated further.

But the conclusions reached by both these institutions reflected "some lack of understanding of the acquisition process as a whole", they said in a joint statement.

"It is also our view that [the committee] would have benefited from a comprehensive presentation of the whole process as this would have avoided misperceptions that have now fuelled unwarranted speculation and assertions in the public domain. It is our view that they should obtain this briefing as a matter of urgency."

They said the critical decision-making structures had included the Cabinet and a subcommittee *4 chaired by President Thabo Mbeki, then the deputy president *3. "Accordingly, the government *4 rejects with contempt any insinuation of corrupt practice on its part."

Regarding questions raised by the auditor-general about the adequacy of the performance agreements, Manuel said there were considerable penalties involved if the contractors did not meet their obligations. He said the offsets from the deal, which, according to the government, would translate into R104-billion worth of investment, generating 65 000 jobs, were not the key motive behind the arms acquisition.

"This flowed from our defence review which found that we needed to acquire the equipment. It is also a constitutional requirement to ensure that we have an effective national defence force," Manuel said. The government was prepared to co-operate with any "legitimate" investigation into any elements of the defence acquisition process, they said.

But as not "a single shred of evidence of actual wrongdoing" had been produced, the government would not allow itself to be diverted to take part in what amounted to "mere fishing expeditions *5", they added. Justice Minister Penuell Maduna will announce tomorrow whether Mbeki will allow the Heath investigating unit to take part in the arms probe.

With acknowledgement to Ranjeni Munusami and the Sunday Times.

*1 Nonsense - the corvette contract has a clause entitled Remedies in the Case of Bribes which allows for contract cancellation.

*2 Who must be held responsible for any fraudulent activity between The Government and its prime contractors, or The Government and its prime contractor's sub-contractors?

*3 Big Fish 5.

*4 Big Fish 7.

*5 On our various mere fishing expeditions we have landed a lot of corrupt men (so far I can possibly see two corrupt women).