Publication: Business Day Issued: Date: 1998-11-20 Reporter: Norman Chandler

Party's Not Over, say Defeated Arms Manufacturers



Business Day

Date 1998-11-20


Norman Chandler


Arms manufacturers who lost out in the R30-billion arms deal have served notice that they will immediately begin lobbying the South African Government in an attempt to reverse their exclusion from the cabinet's list of preferred bidders.

Defeated bidding companies from Spain, France, Canada and the Czech Republic said yesterday that "the party is not over yet". They said they would continue trying to convince South Africa that their terms, prices, conditions and industrial participation proposals were more favourable than those of the winners.

The winning companies were German, British, Swedish and Italian.

The government has said that between three and six months would be required for initensive negotiations to be completed and has given the winning bidders until March 31 next year to provide further input into how industrial participation programmes are to be developed.

In terms of the industrial participation programmes, bid winners are expected to reinvest in South Africa and source certain materials from here.

Miguel Martinex of Spain's Bazan shipbuilding company, said: "What we cannot understand is that our rpice tag was 25% less than the offer by the German Frigate Consortium for the patrol corvettes - the price from them is R6-billion as against our R4,2 billion for what we believe is a superior and tried and tested ship.

"For a country which says it is struggling for every penny, we find this to be an unbelievable decision. We are not taking this lying down."

An initial order to buy four patrol corvettes from Bazan four years ago was rescinded by the government following pressure from parliamentarians and the disarmament lobby.

Representatives of the Bell Canada company which bid for the light untility helicopter contract and was recognised in the industry as the front-runner for a considerable period, were also angered by the decision to grant the contract to the Italian company Agusta.

"We find it incredible, and it would appear to be a political decision", a spokesman said.

He warned that a spin-off could be that the $200-billion North American defence market could be lost to South African companies struggling to break in to that area.

French sources said the failure of any French company to be declared a preferred bidder in any of the projects could affect French support for Pretoria in European Union/South Africa trade negotiations.

The Coalition for Defence Alternatives, a collection of disarmament lobbyists, said yesterday that confidentiality clauses on details of the proposed investments were "a provision ominously reminiscent of the obsessive secrecy of the apartheid era.

With acknowledgements to Norman Chandler and Business Day.