The Democratic Alliance says the credits granted by the Department of Trade and Industry to arms deal suppliers are far too generous compared to those offered in most other countries

The credits granted by the Department of Trade and Industry to arms deal suppliers were far too generous compared to those offered in most other countries, the Democratic Alliance (DA) said in Parliament last week.

Allegations of corruption related to the multi billion-rand deal have been a millstone around the neck of the African National Congress almost since it was signed in 1999.

The credits were accrued through a system of "multipliers" of the original investments or sales under the offset programme and enabled the arms contractors to reach their total obligations more easily than would otherwise be the case.

It emerged during a meeting of Parliament’s trade and industry committee on Friday that SA offered multipliers of well over 20 times the original investment or sales.

In nearly all other countries the figure was well below this, with some offering none at all or as low as six. German arms supplier Ferrostaal, for example, was given a multiplier of 40 for achieving its investment and sales targets.

One of the ways the arms deal was sold to the public was that the offsets would result in investments of about R110bn and create 65000 direct and indirect jobs.

The committee was told a total of 50751 jobs ­ 16917 direct jobs and 33834 indirect jobs ­ had been created through the programme and that in addition 15404 jobs had been either retained or saved.

Trade and Industry Minister Rob Davies conceded his department needed to re-examine the system as part of its total review of the national industrial participation programme. This would remove ambiguities and ensure delivery of the offsets took place within the sector in which the original procurement took place.

Director-general Lionel October said there would probably no longer be multipliers in future as the government wanted direct offsets.

Mr Davies assured MPs that his department had "no interest in letting anyone off" their obligations and would play open cards on the matter. "We don’t have anything to hide. "

DA defence spokesman David Maynier said there were "clearly some serious questions to be answered about how the arms deal offset credits were awarded, and how multipliers were applied.

"How is it that BAE-Saab, which supplied the Gripen and Hawk aircraft, could get an offset credit of $7,2bn when they only actually invested $203m?" he asked.

With acknowledgements to Linda Ensor and Business Day.