CAPE TOWN — The government is racing against time to decide on the acquisition of eight Airbus A400 military transport aircraft, with the price rising dramatically from R17bn to about R47bn.
It has two weeks to decide whether to press on, paying a hefty R30bn extra, or cancel and restart the procurement process for aircraft needed to meet its peacekeeping obligations.
The price rise emerged at a meeting of Parliament’s defence committee yesterday, when arms procurement agency Armscor was grilled on its annual report and its controversial CEO, Sipho Thomo, on his business interests and huge earnings increase.
Democratic Alliance MP David Maynier, who only a few weeks ago was threatened with dismissal from the committee, was congratulated by African National Congress (ANC) MPs for his background work on the state of the Airbus A400 contract.
A payment of R1,1bn due in April had been withheld as Airbus had failed to meet some contractual obligations, said Thomo.
Delays in the A400 project had led to a price escalation from R17bn to R47bn.
Thomo said the government now had two options: either to agree that it could afford the aircraft, vitally needed for SA’s peacekeeping obligations at the new price, or to cancel the contract.
Thomo said an Airbus delegation was in the country last week, and the government should make a decision on the project this month or it would lose the opportunity to cancel the contract. It would then be liable for the revised price of R47bn.
Further questions from Maynier on other costs associated with the A400 and what Armscor was to recommend to the Cabinet were avoided as officials said they still had to brief Defence Minister and the Cabinet. They had also agreed with Airbus that certain information would remain confidential.
Although ANC MPs have been baying for Maynier’s blood over his revelations of “dodgy” arms deals approved by the conventional arms control committee, ANC veteran Andrew Mlangeni and committee chairman Nyamezeli Booi congratulated him yesterday on his probe of Armscor.
They said details of the A400 deal, which was close to spinning out of control, would not have been revealed without his work.
Attempts to probe what appears to be an effective 89% hike in remuneration for Thomo were hampered by the absence of Armscor board chairman Popo Molefe. He was criticised sharply for not attending the briefing.
hartleyw@bdfm.co.za