Parliament’s trade and industry committee yesterday voted to keep secret a confidential report which allegedly disclosed significant underperformance of offset obligations by one of the major suppliers in the government’s multibillion-rand arms deal.

The decision is likely to enhance the perception that the Department of Trade and Industry is not providing a complete picture of the offset programme, which the government used to justify the R30bn deal. It is also likely to increase pressure for greater transparency.

But the department strongly rejects allegations of irregularities.

The committee’s decision was taken on the grounds the report was subject to protection under attorney-client privilege, and that it could not be authenticated.

The Democratic Alliance (DA), however, accused the committee of trying to protect the department from accusations it had misrepresented the actual investments made by suppliers under the offset deal.

The offset scheme ­ which applies to all government purchases of more than $10m ­ aims to ensure the local economy benefits from substantial sums paid by the government to offshore suppliers.

Confidential information obtained by the DA suggested that submarine contractor Ferrostaal invested only €63m of its offset obligation and not the €3bn claimed by the department.

Parliament’s legal advisers recommended to committee chairwoman Joan Fubbs that the three-page document be placed before the committee as a "confidential document", but that no questions be put to the department about it until such time as the committee had received permission from the as-yet-unidentified client involved to use it.

However, the African National Congress-controlled committee voted not to admit the document on any basis on the grounds that it could not be authenticated.

"This decision amounts to an attempt by the portfolio committee to protect the department from real accountability on an issue of monumental public interest," DA trade and industry spokesman James Wilmot said.

"The department has consistently avoided answering questions about how much has actually been invested as part of the National Industrial Participation Programme, and why there is such a significant discrepancy between the reported size of investments, and actual investments," he said.

DA defence spokesman David Maynier introduced the leaked forensic report during a committee meeting last month and asked departmental officials to answer questions on its contents.

This was refused by Ms Fubbs pending legal counsel.

Trade and industry spokesman Sidwell Medupe said the department had consistently stated that the €2,8bn referred to Ferrostaal’s total offset obligations and not the amount it was expected to invest.

"This €2,8bn is broken up into sales (exports and local), credits and investment credits that Ferrostaal was expected to have promoted. Credits are calculated as the actual sales with multipliers.

"We will provide detailed information to the portfolio committee on how the multipliers were determined, and will include information on jobs created and investment made, on March 16."

With acknowledgements to Linda Ensor and Business Day.