No matter how hard one tries to avoid mentioning the government's multi-billion rand arms deal, it just won't go away.

While the Shaik trial in Durban has thus far kept the arms deal and its spin-offs ticking over in the news, the deal also reared its head in Parliament again.

First it was Deputy President Jacob Zuma facing an awkward question time in the House on his alleged dealings with Alain Thetard of the arms company Thales (now Thint) and with Shaik.

Despite the Democratic Alliance's challenge to the invocation of the sub judice rule by the Speaker, the question regarding this alleged meeting was withdrawn.

While the DA's question was always going to be pushing the limits in a sense, it again managed to put Zuma on the defence.

More disconcerting, however, was the recent defence committee hearing at which state-owned arms manufacturer Denel revealed that the Defence Industrial Participation (DIP) military programmes related to the arms deal were in fact running at a loss.

Denel CEO Victor Moche expressed concern about the value being gained from such DIPs. He called them "practically 100% loss-making contracts".

While this news may have slipped quietly by, it has significant repercussions both financially and politically. The reason is that the DIPs go to the very heart of the basis on which the arms deal was "sold" to the South African public.

The expression "off-sets" was used to refer to benefits intended to accrue to South Africa as a consequence of it committing itself to the arms deal.

What this meant was that the main contractors to whom tenders were awarded were required to indicate, in their tenders, which economic benefits they would commit themselves to provide to South Africa.

These included the creation of jobs. Certain of the intended benefits would accrue to local military contractors merely by virtue of them being sub-contractors to the successful tenderers in the arms transactions.

In addition, the tenderers were also required to commit themselves to non-military trade and investment in South Africa. Such non-military benefits are commonly referred to as "National Industrial Participation" (NIP).

It was initially announced by government that off-sets to the tune of R110-billion would accrue to the South African economy in return for the award of the contracts. This figure was later reduced to R104-billion.

These off-sets formed a major (if not the main) basis for the South African public believing that the transactions were desirable. It was stated specifically that "over the medium term, benefits of NIP and DIP fully off-set economic and fiscal costs of the procurement".

In its initial 2001 report entitled Democracy and the arms deal, the Institute of Democracy in South Africa raised certain concerns directly related to these so-called NIPs and DIPs, which it would appear still remain valid more than three years later.

The first is related to their enforceability. While the contractors were required to commit themselves in writing to the NIPs, it is doubtful whether these commitments could ever be enforced in any court.

In its public hearings at the time, the Standing Committee on Public Accounts (Scopa) raised the question of the enforceability of these commitments and was told that penalty provisions in the contracts should ensure that the successful tenderers complied with their obligations to provide the promised NIPs.

The successful tenderers would, therefore, incur penalties if they failed to provide the NIPs as promised.

In most instances, the penalties are about 10% of the value of the tender - small in comparison to the costs of the transactions. It is also not outside the realm of possibility that many tenderers may have inflated their tender prices so as to cater for the risk of their having to pay the 10% penalties.

If so, any defaulting tenderer could escape its obligations to provide the NIPs merely by paying the 10% penalty.

It has also been suggested that certain of the tenderers, when required to commit themselves to providing off-set benefits to South Africa, may have approached companies who were in any event considering investing in South Africa and (after entering into appropriate agreements with those investing companies) claimed such benefits as the promised benefits under their tenders. If this is correct, then any benefits which may accrue to South Africa are not causally attributable to the arms transactions.

These difficulties were neatly summarised in Scopa's report at the time of parliament's investigation into the arms deal. If, indeed, any tenderer was confident of providing the promised NIPs, then there should have been no difficulty in requiring successful tenderers to commit themselves to penalty clauses well in excess of 10%.

Or, alternatively, if it is possible, by spending R29,992-billion, to achieve economic benefits of R104-billion, why does every developing country in the world not spend its entire budget on arms?

Many questions relating to the off-sets have, therefore, not been adequately answered and, together with the comments from Moche last week, provide food for thought.

The Affordability Team initially appointed to look into the cost of the arms deal said that whether government wished to enter into the deal or not would depend on its "appetite for risk". It is unclear why the risk was taken at that time. However, it would appear that Denel is bearing some of this risk as is, no doubt, the South African taxpayer.

Parliament has a duty to continue exercising oversight over the implementation of the deal and to place as much accurate and reliable information about the off-sets before the public as possible.

It may not be able to stop the deal, but it seems to be a clear way to insist on accountability and openness in a deal which, because of its complex nature, remains arcane to most of the public.

Judith February is head of the Political Information and Monitoring Service at Idasa.

With acknowledgements to Judith February and the Pretoria News.