Highly placed industry sources have linked last month’s shock suspension of Armscor CEO Sipho Thomo to his refusal to rubber-stamp South Africa’s R12-billion project of buying Airbus A400M military transport planes.
The government signed a detailed, but secret Declaration of Intent in December last year and the final contracts were due for signing on March 28, according to a recent Department of Defence statement.
Thomo and two other executives from Armscor, the state defence procurement agency, were suspended suddenly in February.
The Armscor board, which is chaired by former North West premier Popo Molefe, issued a terse statement saying only that the suspensions were as a result of ”serious allegations of an administrative nature”. Molefe was appointed as acting CEO.
Armscor has not made the allegations public, but media speculation has mentioned issues such as a supposed security lapse regarding a Ratel combat vehicle on loan to a another country, as well as delays surrounding a tender for the disposal of expired ammunition. It is understood that the Auditor General’s Office has also queried the suspensions — and has yet to receive an explanation.
Several independent sources have told the Mail & Guardian that they believe the claims against Thomo are a pretext to move him aside because of his opposition to the Airbus deal.
The sources included people close to both Armscor and the Department of Defence. All spoke on condition of anonymity, saying the matter was highly sensitive.
In January, the M&G reported that government had flouted procurement procedures in signing the Declaration of Intent, which includes a commitment to taking delivery of at least eight aircraft — and perhaps as many as 12 — between 2010 and 2012.
A legal expert told the M&G that the government could not avoid legal constraints on procurement by dressing it up as a ”programme for the development of skills” — an explanation offered at the time by Secretary of Defence January Masilela.
It is understood that Armscor management agreed with this legal assessment, citing key provisions of the Armscor Act that make the corporation the only entity entitled to procure defence materiel on behalf of the defence department.
In addition, the Act commits the corporation to a fair, transparent and competitive system for the evaluation of all defence materiel acquisitions.
A source at state-owned defence contractor Denel, which hopes to benefit from the deal, told the M&G they were aware that there were ”rumblings at Armscor” that the deal did not comply with procurement policy.
Detailed questions around the A400M issue and the suspensions were put to Armscor on Wednesday last week, but the corporation had not replied at the time of going to press.
Questions about whether the air force had followed procurement procedures have remained unanswered by the department for weeks. Thomo did not answer his cell-phone and his message box was full. It is understood that he has been forbidden to discuss his suspension with the media.
Earlier this month the Minister of Defence, Mosiuoa Lekota, rejected accusations that the government had bypassed government tender processes, saying no decision to buy the aircraft had yet been made.
Instead, Lekota reportedly claimed that South Africa was taking a 5% stake in the European consortium manufacturing the aircraft.
However, Airbus spokesperson Linden Birns told the M&G that South Africa was not becoming a shareholder. ”They are getting a stake in the programme.”
This amounts to a right to a share of the work on the roughly 194 planes on order. But, Birns refused to confirm whether this work-share was directly related and proportional to a signed commitment to purchase a number of aircraft. ”I don’t want to speculate on the contract; it’s still the subject of negotiation.”
Defence department head of communications Vuyo Zambodia confirmed in the March issue of SA Soldier that the ”government is committed to taking delivery of approximately eight aircraft as the programme matures between 2010 and 2012.”
Airbus military spokesperson Alaisdair Reynolds said the deal amounted to ”a long-term partnership” for the life of the programme. In exchange, the country would take up new aircraft at the time scheduled in the agreement and at an agreed price.
The deal has been sold as a way of resuscitating South Africa’s aerospace industry, particularly Denel. The Denel board was due to ratify the agreement in January, but it is understood that final agreement has not yet been reached.