The government flouted procurement procedures in signing a commitment to purchase up to 12 new military transport aircrafts at a cost of about R1-billion each.
The Mail & Guardian revealed last year that the government was to buy A400M heavy transporters from Airbus Military — in return for local aviation companies gaining a proportional share in supplying 194 aircrafts to seven European countries and South Africa.
The government has admitted ignoring section 217 of the Constitution, which requires contracting for goods and services ”in accordance with a system which is fair, equitable, transparent, competitive and cost-effective”.
Secretary for Defence January Masilela confirmed this in an affidavit in response to a bid by activist Terry Crawford-Browne to stop the deal.
Masilela said: ” … This is not an acquisition programme, but a programme for the development of skills. Consequently, section 217 of the Constitution is not applicable.”
In effect, the government argues it is acquiring a share in manufacturing the 194 aircrafts to support local industry — and will be buying its own planes as a by-product.
Crawford-Browne dismissed this as semantics: ”It’s buying, no matter how they want to dress it up.”
Law professor David Unterhalter told the M&G that the government could not avoid constitutional prescriptions simply by the way in which it structured the deal. ”The heart of this is an acquisition: if public monies are spent to acquire aircraft, you can’t ignore the constitutional requirements.”
The government describes the agreement signed with Airbus on December 15 as a ”declaration of intent”, but it appears to be a detailed contract that it has refused to make public, citing ”commercial confidentiality”.
Armscor responded tersely: ”The A400M is not a normal defence acquisition programme. Therefore, Armscor is not involved at this point in time.”
However, a well-placed Armscor source said the parastatal had known nothing about the deal and was not aware that defence procurement procedures were followed.
These include the approval of a ”staff requirement” document, setting out the detailed needs and specifications of the end user, the South African Air Force. Such steps are required under Defence Department and Armscor procurement rules.
Ministry of Defence spokesperson Vuyo Zambodia said the government was committed to participation in the programme and to taking delivery of aircraft, ”but there is as yet no procurement agreement. When the question of procurement arises it will be handled in accordance with the law.”
Another well-placed defence source alleged that the air force was ”not happy” about the way the deal had come about. Zambodia said the force ”has been consulted and involved in the process”.
Even the supposed major beneficiary — Denel — appears to have been caught on the back foot.
In a statement the corporation noted: ”Denel has initialled the commercial contractual terms and conditions for the A400M, which is [still] subject to the approval of the board of directors … the company could not answer other questions as negotiations were still under way.”
Similar claims of protecting the defence industry were used to justify the government’s 1998 decision to buy the BAE Systems Hawk jet trainer, rather than its cheaper Italian rival.
BAE Systems was expected to buy into Denel and offer lucrative offset packages on the Hawk, but the deal fell through and the corporation has recently complained of the poor quality of the offsets.