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Cape Town - The financial predicament of state-controlled arms-purchasing agency Armscor is still, after many years, being referred to as an impediment to affording critically needed expertise.
Nonetheless, the remuneration of Armscor's chief executive, Sipho Thomo, has shot up by almost R1.5m, and this despite the fact that the company received R479m-odd from taxpayers in the 2009 financial year (2008: R416m).
And questions are being asked about Thomo's managerial ability, as well as the absence of any military threat to South Africa.
The 89% hike in Thomo's package (benefits, salary and bonuses), from R1.7m in 2008 to R3.3m in 2009, will ensure that he is greeted by a battery of questions when he has to present Armscor's annual report to Parliament this week, comments David Maynier, DA spokesperson on defence and military veterans.
A further contribution to Thomo's package is payment in terms of an agreement that prevents him from working for any competitor.
Thomo has occupied the position since 1999.
Maynier says he doubts whether Thomo is really that sought after. The fact that Armscor is basically a monopoly, moreover, eliminates competition.
Thomo is not the only chief executive of a state institution whose salary increase is currently lifting eyebrows. The head of Eskom, Jacob Maroga, received a salary hike of R1m-odd, to R5m, which was highlighted last week.
Thomo's benefits in the 2008/09 financial year rose from R108 624 to about R1.4m. His salary went up from R1.2m to R1.45m-odd.
Maynier says Thomo had to receive counselling on his management style. There has also been a hold-up in acquiring the strategic heavy-lift aircraft, the Airbus A400, a ground-based defence system and an infantry battle vehicle.
Armscor's executive directors' combined bonuses and performance benefits rose from R168 192 to R1.6m in the 2008/09 financial year.
Armscor's surplus declined by R6m to R38m, compared to 2008. And the entity produced a R9m loss.
In the annual report Thomo says the biggest challenge is to get sufficient funds to afford skills and transfer them.
Armscor's existing expertise largely comprises an older corps of white workers.
After negotiations with the National Treasury and the Department of Defence the funding problem should be partly resolved during the coming financial year - according to Thomo.
Government's weapons manufacturer Denel, which was established in the 1990s after Armscor was split up, also suffers losses every year and has recently applied for a further R1.7bn bailout.
In the period under review Armscor's purchases amounted to R10.5bn.
- Sake24.com
For more business news in Afrikaans, go to Sake24.com.
