HANNES DE WET, Pretoria | Tuesday
THE government on Monday defended its decision not to opt out of the second portion of the defence renewal package, saying there was no need to cancel the purchase of 12 Hawk trainer aircraft.
”There was no reason to even consider not taking the second tranche,” Trade and Industry Minister Alec Erwin told reporters in Pretoria.
Since the original purchase was made, South Africa’s deficit and fiscal position had improved considerably.
”So Cabinet can foresee no risk whatsoever in the second tranche. We remain committed to the total package,” Erwin said.
He also pointed out that a withdrawal from the second portion would have pushed up the cost of financing and equipment under the defence package.
”It’s a relatively costly exercise to use the opt-out clause.”
In terms of the package — announced in September 2000 — the government is to procure, among others, nine dual-seater and 19 single-seater Gripen aircraft and 24 Hawk trainer aircraft.
At the time of making the purchase, Erwin said, the government negotiated with the suppliers a number of escape clauses.
This allowed South Africa to cancel 12 of the Hawk aircraft by the end of last month.
In terms of the third tranche, South Africa could opt to stop the purchase of 19 single-seater aircraft by the end of March 2004.
”The tranches are safety valves if we need them. So, it is not a question that when we come to this date, we must now decide do we want to buy the second or the third tranche,” Erwin said.
”It’s only if we feel there was sufficient economic reasons for us to withdraw from a further tranche, that we would invoke the escape options.”
The cost of 12 Hawk aircraft was in the region of R2-billion.
Erwin said Cabinet had to decide whether the economical circumstances constituted such a severe situation that it was necessary to stop the second tranche.
Such conditions did not exist.
”Our fiscal position has improved considerably in terms of the deficit, revenue collection etc. We have been very successful in restructuring and re-profiling our debt,” Erwin said.
Another risk assessment would be made in time for the March 2004 deadline of the third tranche.
It was expected that the full procurement programme, including the second and third tranche aircraft purchases, would amount to R52,7-billion over a period of about 12 years.
Defence Minister Mosiuoa Lekota, who also addressed the briefing, reiterated that the government had no choice but to buy the new military hardware.
It inherited outdated defence equipment from the apartheid regime.
”For those who may think we longer no longer need a defence force, may I remind you that a well-trained, well-equipped force can prevent war,” Lekota said.
”We have to keep in mind that defence purchases are not like going to a shop to buy soap. You make the order, and it takes years before delivery happens.”
Wars tended to come without warning, as the airborne attacks in the United States on September 11 had shown, Lekota said.
Erwin said the defence and other industrial participation packages under the defence contract were all on track.
”None of the suppliers is behind in their obligations. In terms of projections of performance for 2004… we are looking at about a billion (US) dollars above the projected performance,” Erwin said.
Democratic Alliance MP Raenette Taljaard questioned Erwin’s explanation for the decision not to opt out the second tranche.
The collapse of the rand and rising inflation and interest rates provided abundant economic reason to cancel the second portion, she said in a statement.
”There is little doubt that the government will probably reach the same disastrous decision in relation to the third tranche in 2004.”
Had the government withdrawn from the second tranche, the money saved could have been used to double the number of police officers or to provide housing subsidies for 337 500 destitute families, Taljaard said. – Sapa