AN urgent application has been lodged in the Cape High Court by Economists Allied for Arms Reduction (Ecaar) to prohibit the government from buying a fleet of sophisticated military transport aircraft at a cost of R1 billion each.

Ecaar claims the contracts will ultimately be paid for by taxpayers and will hurt the poor, on whose behalf it has brought the application.

The lobby group has applied for an interdict against the ministers of Transport, Public Enterprises, Defence and Trade and Industry from concluding contracts with European Aeronautical Defence Systems and Airbus for the supply of eight to 14 A400M Airbus aircraft for the defence force.

Ecaar also seeks an order directing that the offsets fail the requirements for government procurements and that the intended purchase be declared unconstitutional.

Offsets refer to substantial investments a country is offered if it concludes arms contracts to a certain monetary value.

In an affidavit, Terry Crawford-Browne, of Ecaar, said the ministers were of importance in the application because of their roles in the intended purchase and the intention that the offsets benefit Denel, the arms company, controlled by the minister of Public Enterprises.

He claimed that, in terms of Section 217 of the Constitution, the government should have gone out to tender and that the offsets failed what was stated in this section.

Section 217 stipulates that government procurements must be conducted in accordance with a system that is fair, equitable, transparent and cost-effective.

Crawford-Browne said the application was brought on behalf of poor people "because of the negative economic impacts of expenditures on armaments".

He said in his affidavit that offsets were prohibited under the rules of the World Trade Organisation for civil trade transactions because of the "distortionary" effect they have on trade and "their notoriety for corruption".

Despite this, in 1997 Armscor and the Department of Trade and Industry decided to make offsets a mandatory requirement of all government foreign transactions greater than $10m.

Crawford-Browne said it had been publicly stated that spending R3bn on the arms deal would generate R110bn in offsets to create more than 650 000 jobs.

"Yet recent testimony in Parliament by Denel's CEO revealed that over 80% of the Defence Industrial Participation contracts are loss-making, and that Denel is all but bankrupt as a consequence," he said.

Crawford-Browne said it was evident from media reports that there had not been compliance with tender processes.

"The undoubted consequence of these contracts, however, unless prohibited by court order, will be that South African taxpayers will again be the victims of a scam perpetuated by an industry that is internationally notorious for corruption and unscrupulous behaviour," he said.

The case is expected to be heard today.

With acknowledgements to Fatima Schroeder and the Cape Times.