THREE Cabinet ministers have strongly rejected reports and “insinuations” that government misled the public on the cost of South Africa’s controversial multi billion rand arms deal, and that there was ?undue influence? in the awarding of prime contracts.
Finance Minister Trevor Manuel told Parliament’s watchdog public accounts committee (Scopa) that, like any long term financing programme, the cost on the day of signing should be viewed as the contract price.
This was $4.78bn, and not the R43.8bn referred to in the media and mentioned in Scopa’s report to the National Assembly.
Manuel, Trade and Industry Minister Alec Erwin and Defence Minister Mosiuoa Lekota appeared before the committee to explain their criticism of its interim report to Parliament. Along with Public Enterprises Minister Jeff Radebe, the four told a press conference in January that the committee was incompetent and irresponsible, and did not understand how arms deals worked.
In its report, Scopa recommended a multi-agency probe into the arms procurement package.
The deal has been clouded in controversy following allegations of corruption which prompted a special audit by Auditor-General Shauket Fakie.
“If we had had cash on the day of the contract, we would have paid R30.3bn,” Manuel said.
The cost would be higher once all exchange rate, interest and contract escalation fluctuations of the original price were calculated over the entire period of the deal.
“The minute you bring in extraneous issues into the calculation, you are distorting the point,” he said.
Scopa’s report, adopted by the National Assembly in November last year, said it had become clear that Cabinet omitted certain cost implications which would significantly add to the State’s commitment. By September 2000, the cost of the package had risen to R43.8bn.
Manuel said an impression had been created, incorrectly, that the cost had suddenly escalated. He rejected the impression that the public had been misled.
Earlier, the committee appeared to reach a stand-off when chairman Gavin Woods and the ministers accused each other of failing to adequately consult the other party before making their opinions public.
Erwin said individuals could not unduly influence the awarding of contracts in the arms deal because there were built-in safeguards.
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