• SABC shenanigans

    SA has already embarked on a slippery slope to autocracy, warns Terry Bell in Inside Labour.

  • Zim tastes people power

    Protests in Zimbabwe are forcing Mugabe to face anti-government sentiment, says Memory Mataranyika.

  • Platinum handshake

    Officials who try to do what's right risk far more than blessed wrongdoers, says Solly Moeng.

All data is delayed
Loading...
See More

DA: DTI concedes over arms deal offsets

Mar 16 2012 17:16
Sapa

Cape Town - The trade and industry department (DTI) has conceded that Ferrostaal has invested a total of only €63m (about R628.67m) in arms deal offsets, the Democratic Alliance said on Friday.

DA spokesperson David Maynier said Trade and Industry Minister Rob Davies and officials from his department revealed "shocking new information" about arms deal offsets to parliament's portfolio committee on trade and industry on Friday.

Davies and the DTI officials appeared before the committee to deal with questions raised as a result of a leaked internal audit document produced by Debevoise & Plimpton.

It investigated "questionable and improper payment" made by Ferrostaal, which formed part of a consortium that supplied submarines to South Africa.

The leaked internal audit document stated that, whereas Ferrostaal had an obligation to invest €3bn (about R29.9bn) under the arms deal offset programme, they had in fact invested only €63m.

"The department conceded that the leaked internal audit document was correct and that Ferrostaal had in fact only invested a total of €63m," Maynier said.

"During the briefing, the department also revealed shocking new facts about the arms deal offset programme, including that a total of 50 751 jobs, comprising 16 917 'direct jobs' and 33 834 'indirect jobs', had been created as a result of the arms deal offset programme, rather than the 65 000 jobs promised."

The total actual investment by each of the arms deal companies under the offset programme was:

- BAE/Saab, $203m (about R1.54bn) instead of the $7.2bn (about R54.9bn) obligation;

- German Submarine Consortium, €63m instead of €2.85bn (about R28.44bn);

- German Frigate Consortium, €44.4m (about R443m) instead of €2bn (about R19.9bn)

- Thales, $139.7m (about R1.06bn) instead of $652.4m (about R4.97bn); and

- Augusta (Light Utility Helicopters), $49.3m (about R376.2m) instead of $767.9m (about R5.86bn).

Maynier asked: "How is it that BAE/Saab, which supplied the Gripen and Hawk aircraft, could get an offset credit of $7.2bn, when they only actually invested $203m?

"And how is it that Ferrostaal, which supplied the submarines, could get an offset credit on €2.85bn, when they only invested €63m?"

There were clearly some serious questions to be answered about how the arms deal offset credits were awarded, and how the so-called multipliers were applied, given the wide variance between the total obligation and the actual investment by each arms deal company.

This could only be done if the DTI laid its cards on the table and provided a full report on the arms deal offsets.

"This the minister has agreed to do. The DA therefore welcomes Minister Davies' commitment to make a full report on the arms deal offset programme available to the portfolio committee on trade and industry.

"This will bring an end to a struggle, spanning more than a decade, to squeeze detailed information of the arms deal offset programme from the department of trade and industry," Maynier said.

arms deal  |  da  |  dti

 
 
 

Read Fin24’s Comments Policy

24.com publishes all comments posted on articles provided that they adhere to our Comments Policy. Should you wish to report a comment for editorial review, please do so by clicking the 'Report Comment' button to the right of each comment.

Comment on this story
12 comments
Comments have been closed for this article.
 

Company Snapshot

We're talking about:

THE SAVINGS ISSUE

Saving can make a lot of things possible, but we all know how hard it is to save. This special Savings Issue will help you get focused.
 

Money Clinic

Money Clinic
Do you have a question about your finances? We'll get an expert opinion.
Click here...

Voting Booth

Sarb's decision to keep the repo rate unchanged is:

Previous results · Suggest a vote

Loading...