Defence and Military Veterans Minister Lindiwe Sisulu will brief President
Jacob Zuma today on the Airbus Military transport aircraft deal that threatens
to tip the country into a fresh arms deal
scandal *1.
She is also set for a showdown with Armscor chief executive Sipho Thomo over his
bombshell revelation in Parliament on Wednesday that South Africa faced an
estimated R47 billion invoice for the deal.
This was information that Sisulu said should never have been made public, as "very
delicate negotiations *2" were under way with the company.
She said the government had been "embarrassed", its bargaining leverage with
Airbus Military compromised and good diplomatic relations with the European
countries involved in the deal put at risk.
"It's a highly embarrassing matter for me as a minister, because that's
not how we would have wanted our negotiations
conducted *3... it involves our credibility
internationally."
Asked whether Thomo's head would roll, Sisulu said: "Can
I leave that to your own judgment? *4 Government has been
put in a very embarrassing situation."
Thomo acknowledged yesterday he was "in
hot water".
Sisulu will meet Zuma, Thomo and Armscor board chairman Popo Molefe at a
military parade and wreath-laying ceremony in Bloemfontein to mark the
Department of Defence's 10-year involvement in international peace missions in
Africa.
The eight A400M freight planes at the centre of the fiasco were ordered by
former president Thabo Mbeki's cabinet to assist with these missions. But
proper tender processes were not followed *5
and now Zuma's administration has to try extricate itself from the mess.
Airbus Military yesterday denied categorically that any price - currently part
of the sensitive negotiations under way with the South African government -
had yet been agreed to *6.
Spokesman Linden Birns said R47bn was "a long way off", and the company had
approached the Department of Defence for clarity on Thomo's comments.
Sisulu also cast doubt on the R47bn price tag.
She told the Cape Times that the cabinet had yet to take any decision on whether
to stay in or pull out of the Airbus deal.
She had first learnt of it from the handover brief left for her by her
predecessor, Mosioua Lekota, after she was appointed defence minister in May,
just a few weeks before the deadline for a decision fell.
A six-month extension had been requested and granted, and talks had been in
progress ever since.
Given the recession and demands on the fiscus,
there was a big question-mark over the deal's
affordability *7, while withdrawing from it could lead to
the loss of the R2.9bn already invested.
She said the R47bn figure could have been a calculation by Armscor of the
estimated escalation in the cost of the planes, whose production has been
delayed for five years.
Thomo confirmed this yesterday, ascribing the bulk of the increase to the
inclusion of post-delivery costs of servicing the aircraft over 30 years.
"The original R17bn only included two years of maintenance, at a cost of R6bn,"
he said.
Sisulu said a further R8bn had been pledged, but not transferred, in terms of an
industrial participation package involving the transfer of technology and skills
to South African companies.
Complicating the issue is that the first plane, according to Airbus Military, is
ready for delivery "within weeks".
For the government, accepting one would mean taking - and paying - for them all,
exposing the Zuma government to the huge political risk of
another arms deal scandal *8.
With acknowledgements to Gaye Davis,
Christelle Terreblanche and Cape Times.
*1As ye make ye bed
so shall ye lie it it.
Very uncomfortably it seems.
*2One for me, one for ye, one for me, one for ye.
Very delicate negotiations, indeed.
*3We didn't want a tender procedure and neither did we want
to inform the South African taxpaper that the cost was going up from R7,5
billion, to R12 billion, to R17 billion and that with 30 years maintenance
thrown in it will be R47 billion.
Thomo has always been somewhat of a tweezle in these matters.
In the main Arms Deal they tried to hide lifecycle costs from the process and
Armscor got burnt.
So this time Armscor advises Parliament of the lifecycle costs (actually just
one component of them( and gets burnt - but this time by the minister.
It's time that acquisition was run by professionals.
There's a cadre of professionals in this country who have been doing defence
materiel acquisition for forty years.
Use them, don't lose them or abuse them.
*4Bye, bye.
*5More likely, no tender processes were not followed.
*6Bought by the tweezles on an opened ended price and
commissions ticket.
*7There was or should always have been a big question-mark
over the deal's affordability.
But the far bigger question was the necessity.
*8Luverly, luverly, luverly.
But that's just the bile coming out after having my IMS deselected from the
corvette combat suite.
The tastiest bile possible this side of an SFO success and the resurrection of
Madame Edith Boizette.