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Cape Town - Armscor is still trying to secure a written undertaking from European aircraft maker Airbus to repay R3bn on the cancelled contract for eight A400 military transport planes, its chairperson conceded on Thursday.
Retired Lieutenant-General Moreti Motau said Airbus finally agreed in a meeting in France last week that it owed Armscor the money, and French Defence Minister Herve Morin then undertook to make sure the manufacturer followed through.
Armscor CEO Sipho Mkwanazi was now formulating the required letter of demand for the money plus accrued interest.
"We met Airbus last week... and they indicated to us that the issue really was not about the money, that Airbus could pay the money overnight if need be," Motau told parliament's standing committee on defence.
"But the issue was trying to lock us into some sort of relationship which Airbus thought was very important. But we have since that meeting, or during that meeting, got an undertaking that Airbus was now going to pay.
"Our minister met the defence minister of France, who actually made an undertaking to the minister that he will ensure that Airbus pays the money.
"The giving of an undertaking is a legal requirement... you must actually send a letter of demand. We want to believe that the issue with Airbus will actually be finalised in a very short time."
Motau and Mkwanazi indicated to MPs that Airbus had been playing cat and mouse with the South African arms procurer for more than 18 months since Pretoria cancelled the deal in late 2009.
The government cancelled the deal after it emerged that delays on Airbus's side had driven the cost from R17bn to R47bn.
Mkwanazi said Airbus agreed to pay the money in five instalments between January 2011 and December 2012, then went back on its word and threatened to pull out of industrial partnership packages worth R2.3bn with Denel Saab Aerostructures and Aerosud.
"Instead, Airbus turned around and sent a letter that the agreement was linked to the offsets."
Motau said the ploy was doomed because the offset deals were contained in separate contracts.
"Unfortunately for Airbus, Airbus didn't actually link these work packages to the contract and neither did we," Motau said.
"The contracts are actually independent contracts and Airbus can be sued independently on those work packages. We were not really worried."
"We are in the process of sending a letter which notes our meeting and that we expect that the payment will be soon. We hope that they will this time honour the agreement which we have with them."
Mkwanazi declined to tell MPs how much interest had accrued on the money Armscor was claiming back, but the department's annual report for 2009/10 put it at R72m.
The defence ministry has always insisted that it had a right to reimbursement of pre-delivery payments.
Minister Lindiwe Sisulu said at the time of cancellation that the contract provided for unilateral cancellation if there was a delay of 14 months in meeting milestones.
Retired Lieutenant-General Moreti Motau said Airbus finally agreed in a meeting in France last week that it owed Armscor the money, and French Defence Minister Herve Morin then undertook to make sure the manufacturer followed through.
Armscor CEO Sipho Mkwanazi was now formulating the required letter of demand for the money plus accrued interest.
"We met Airbus last week... and they indicated to us that the issue really was not about the money, that Airbus could pay the money overnight if need be," Motau told parliament's standing committee on defence.
"But the issue was trying to lock us into some sort of relationship which Airbus thought was very important. But we have since that meeting, or during that meeting, got an undertaking that Airbus was now going to pay.
"Our minister met the defence minister of France, who actually made an undertaking to the minister that he will ensure that Airbus pays the money.
"The giving of an undertaking is a legal requirement... you must actually send a letter of demand. We want to believe that the issue with Airbus will actually be finalised in a very short time."
Motau and Mkwanazi indicated to MPs that Airbus had been playing cat and mouse with the South African arms procurer for more than 18 months since Pretoria cancelled the deal in late 2009.
The government cancelled the deal after it emerged that delays on Airbus's side had driven the cost from R17bn to R47bn.
Mkwanazi said Airbus agreed to pay the money in five instalments between January 2011 and December 2012, then went back on its word and threatened to pull out of industrial partnership packages worth R2.3bn with Denel Saab Aerostructures and Aerosud.
"Instead, Airbus turned around and sent a letter that the agreement was linked to the offsets."
Motau said the ploy was doomed because the offset deals were contained in separate contracts.
"Unfortunately for Airbus, Airbus didn't actually link these work packages to the contract and neither did we," Motau said.
"The contracts are actually independent contracts and Airbus can be sued independently on those work packages. We were not really worried."
"We are in the process of sending a letter which notes our meeting and that we expect that the payment will be soon. We hope that they will this time honour the agreement which we have with them."
Mkwanazi declined to tell MPs how much interest had accrued on the money Armscor was claiming back, but the department's annual report for 2009/10 put it at R72m.
The defence ministry has always insisted that it had a right to reimbursement of pre-delivery payments.
Minister Lindiwe Sisulu said at the time of cancellation that the contract provided for unilateral cancellation if there was a delay of 14 months in meeting milestones.
