Cape Town — Arms contractor MAN Ferrostaal was given extra time to address the shortfalls in meeting offset targets under the multibillion-rand arms procurement package, Trade and Industry Minister Mandisi Mpahlwa said yesterday.

Arms contractors undertook to invest in the economy and were given milestones to meet their commitments. A government review last year showed MAN Ferrostaal lagged its targets.

Mpahlwa said in a written reply to a questiion in Parliament by Democratic Alliance (DA) trade and industry spokesman Enyinna Nkem-Abonta that the contracts obliged government to grant the German Submarine Consortium, of which the company was a part, more time to address the shortfalls.

"The company's performance will be assessed once the time it was granted lapses," he said.

The DA has been pressing government to impose penalties on defaulting contractors.

Mpahlwa said all parties were satisfied with the progress of BAE/SAAB's investment obligations.

In response to a question by DA MP Pierre Rabie, Mpahlwa said the Industrial Development Corporation planned to sell selected shares in unlisted financial entities.

The minister said that the sale would benefit black economic empowerment and small and medium enterprises, as the capital generated could be ploughed back into economically viable new industries.

With acknowledgements to Linda Ensor and the Business Day.