The arms deal between South Africa — through Denel — and India should be rescued by the intervention of Minister of Public Enterprises Alec Erwin, says the official South African opposition Democratic Alliance.
DA public-enterprises spokesperson Martin Stephens said in a statement on Monday that Erwin is the representative of the main shareholder in Denel — the state-owned arms manufacturer — and he should put pressure on the Denel board to save the deal.
Erwin should urge the board to initiate negotiations with the Indian government in order to save the deal and preserve future commercial relations between Denel and the Indian defence ministry. He noted that India and South Africa enjoy friendly relations.
Stephens said Denel needs to explain to South Africa why it applied to the Johannesburg High Court seeking relief against the State Bank of India.
“The application was struck from the roll on Friday,” he noted.
Stephens suggested it was an ill-advised application, especially in the context of Denel’s parlous financial position.
“It is more important to save the deals than to indulge in court actions. The arms contracts would have earned the parastatal millions of rand, not only ensuring the retention of hundreds of jobs but also mitigating the losses that Denel incurs and that the South African taxpayer pays for,” said Stephens.
The urgent application sought relief from paying a guarantee — part of a multimillion-rand arms deal — of R25-million. The Indian government suspended the deal two years ago, saying Denel had not met delivery targets. Denel was also accused of paying a bribe to secure the deal, which it has repeatedly denied. — I-Net Bridge