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SA set to award defence contract... Foreign investment into SA tops the lis... Excluded groups want their share of bl... |
SA set to award defence contracts
British and German bidders are likely to
be the biggest winners in R15-billion
deal, writes HENRY LUDSKI
On Wednesday, the Cabinet is expected to make the final decision on just how far it is prepared to go to replace outdated Defence Force equipment with state-of-the-art weaponry. Despite the belt-tightening imposed by a weak rand and unmet growth targets, South Africa is expected to take the plunge on its biggest purchase of foreign-made equipment. A German consortium is set to win the contract for three submarines and the supply of four Meko Corvettes, while Saab and British Aerospace are expected to secure the contract to supply 28 Gripen advanced fighter aircraft. The departments of Defence and Trade and Industry are said to be pushing for a decision this week to coincide the announcement with the Armscor-organised Dexsa defence exhibition at Waterkloof Air Base in Pretoria, which runs from Tuesday to Saturday. But Shamin Shaikh, Defence Force chief of acquisitions, said: "Cabinet doesn't shuffle its agenda to coincide with air shows." However, according to a Defence Force source, the Cabinet has been approached to place the issue on its agenda for this week. On display will be the latest technological advances from various countries' manufacturers - a number of which could walk off with contracts to supply SA with air force, navy and army equipment to last it well into the 21st century. Despite the proposed purchases taking place in a "guns or butter" context, Deputy Defence Minister Ronnie Kasrils remains positive the deals will be approved. "I can't guarantee 100% that Cabinet will approve everything we are asking for, but I am optimistic that we will get the go-ahead for the expenditure," said Kasrils. The Defence Force has made its pitch on the strength of the up to R50-billion in foreign counter-trade which the R15-billion outlay is expected to generate. It estimates 30 000 jobs will be created. The international defence community will watch closely how SA splits up contracts between manufacturers from the seven bidding countries. Although the details are a closely guarded secret, there are some front-runners for contracts. A German consortium is expected to walk off with the estimated R8-billion contract for three submarines to replace the navy's ageing Daphnes and for the supply of four Meko corvettes. Saab and British Aerospace are expected to secure the contract to supply 28 Gripen fighter aircraft. Britain is also favoured as supplier of five marine helicopters required for the corvettes. Italy is the front-runner to supply 40 light utility helicopters. It is understood the purchase of 108 main battle tanks has already been shelved as part of a Defence Force budget-slashing exercise to scale down its force requirements and purchasing plans. The difficulty facing the Cabinet is that any authorisation of increased defence expenditure will amount to a long-term commitment to high defence budgets, which goes against government's expressed commitment to social spending. The government will have a difficult job convincing NGOs and community organisations that the expenditure is justified given SA's high levels of poverty. Jacqui Boulle, of the South African NGO Coalition, said given the country's limited resources, any expenditure which was not directly targeted at poverty alleviation and employment creation could not be justified. "If these deals go ahead, it will at an enormous human cost to the country," she said. According to Helmoet Heitman, SA correspondent for Jane's Defence Weekly, "it's now or never" for the Defence Force. "SA is at the moment getting the best deals that it could have hoped for because the offers were made at a time when the manufacturing industry was depressed and suppliers were looking for business."
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