The government’s cancellation of its order of eight Airbus A400M transport aircraft was absolutely the right thing to do, drawing a line through a contract it should have never signed in the first place.

The design and development of a clean-sheet aircraft such as the A400M is a costly and uncertain process, and often beset by numerous delays. It is no different with the development of the A400M, which is running four years behind schedule, and the first test aircraft is yet to make its maiden flight.

SA, with it numerous social and infrastructure demands, can ill afford to dabble in such an ambitious project. Especially now that the economic downturn has taken a massive bite out of the state’s finances, requiring the country to take on more debt than South African taxpayers would like.

SA is fortunate that it was able to extricate itself from the R47bn deal, and is now able to invest its money in more pressing projects such as Eskom’s infrastructure plan, housing the poor and looking after the sick. The ability to pull out of the A400M programme is a luxury the bigger partners in the programme, including the UK, France and Germany, did not have. They are tied in for the duration of the programme. It is an opportunity SA must not squander.

Finance Minister Pravin Gordhan has urged the government to cut unnecessary spending and use its limited financial resources where they are needed most.

The cancelled contract is the first vital step towards a more financially prudent government. It may even be possible that cabinet ministers will take the next step by trading in their BMWs for Toyotas.

For while the cancellation of the A400M will go some way to easing the pressure on the fiscus, there is much more to be done to halt wasteful spending. It must also be borne in mind that the cancelled Airbus order is not without consequences or further expense.

The SA Air Force (SAAF) is now without a replacement for its ageing fleet of C130 transport aircraft, which don’t have a life span much beyond 2016. Unlike other military aircraft, SA cannot do without large transport aircraft, which are used beyond military exercises for humanitarian and social missions as well.

In the next few years, the government will have to fork out for new transport aircraft. Fortunately, there are cheaper alternatives to the A400M but it may require a rethink of SA’s role as peacekeeper on the continent. A smaller aircraft, such as the modern C130J may not fulfil the SAAF’s payload requirements needed to operate in Africa, but the C130 has served the SAAF for decades and there is no reason it can’t do so in future.

Whatever the government decides in the next few years, SA cannot afford to be locked into another unfavourable and costly contract.

With acknowledgements to Business Day.