Airbus scandal: Here we go again

By Christelle Terreblanche and Gaye Davis

Former members of Thabo Mbeki's government could be forced to explain the rationale behind the R47 billion Airbus military freight planes fiasco as demands for a full-scale probe surge.

There are calls from across the political spectrum for the contract to be cancelled and for heads to roll after this week's revelation that the cost of the deal had ballooned from R17bn to an "estimated" R47bn.

Cosatu general secretary Zwelinzima Vavi said it proved President Jacob Zuma's new government had been "sabotaged by decisions taken by its predecessor".

Vavi demanded the government or Parliament get to the bottom of the "cruel" 2006 deal to buy eight new-generation freight planes for its African peace missions at such a cost.

An irate Defence and Military Veterans Minister Lindiwe Sisulu said this week that "some explanation has to be given to cabinet", a reference to the possibility that those who agreed to the deal - which never went out to tender - might be called on to explain.

Sisulu was briefed on the deal by her predecessor, Charles Nqakula.

She said that as far as she was aware, none of cabinet's current members had been party to the decision.

The extent of the government's exposure to the spiralling costs of the contract emerged in parliament this week when Armscor CEO Sipho Thomo was subjected to intense questioning in the national assembly's defence committee, chaired by ANC MP Nyami Booi.

MPs' interest was piqued by the Auditor General identifying the R2.9bn so far spent in pre-payments as possible irregular expenditure.

Sisulu briefed Zuma on Friday in Bloemfontein, when the defence force marked South Africa's 10 years of peacekeeping missions in Africa.

Unlike the C130s used currently, the Airbus A400Ms are large enough to ferry Oryx helicopters without their rotor heads having to be removed and reassembled. But production delays have postponed delivery by four years to 2016, and costs are rising.

Sisulu was adamant this week that the Zuma administration did not want "another arms deal" scandal.

The outcome of negotiations with Airbus Military on the future of the deal would have to be taken to cabinet for approval.

Facing unprecedented revenue shortfalls and with the economy in the grip of a recession, the government is caught between its duty to meet the contractual obligations agreed by the Mbeki government and whether the planes are affordable or even necessary.

"Right now we are talking in a cloud. We are talking in a vacuum and what would be infuriating cabinet is that they actually have not been briefed," Sisulu said.

She was referring to the fact that a final price for the planes has yet to be determined, given that Airbus has been hit with delays - which offers the government a measure of bargaining power.

The "very delicate" negotiations underway pivot on whether South Africa can terminate the contract - and how big a price will have to be paid.

For the new government, explaining a multi-billion rand expenditure on military equipment destined for use outside the country's borders will be a hard political sell.

Pressure is now mounting for a thorough investigation to be led by parliament.

DA shadow defence minister David Maynier has said several line ministers were involved. The contract also allows South Africa to be a partner in the struggling A400M Airbus programme, which is spearheaded by a European consortium.

Maynier blasted Sisulu for not sharing the "massive risk" posed by the deal with parliament's defence committee and accused her of covering up. Sisulu said she had intended briefing the cabinet and parliament, but only once negotiations had been concluded.

Sisulu is due to meet the defence committee on October 28, and will now be briefing the cabinet much earlier.

Cosatu is also calling for a full inquiry.

The labour federation's sights are set on the defence minister at the time, Mosiuoa Lekota, now president of Cope, and his erstwhile cabinet counterpart Alec Erwin, who was trade and industry Minister before taking over public enterprises.

"Lekota denounces corruption, yet he and Erwin did nothing to investigate these transactions, which at best involved blatant irregularities and profligate misuse of public money and, at worst,were criminal acts.

"There appears to have been a culture of impunity in government departments in which certain people were untouchable," Cosatu said.

The Ceasefire Campaign said those ministers who agreed to the deal should be allowed "no impunity", but should be "investigated, disciplined, and, where appropriate, summarily dismissed".

Lekota declined to answer any questions about the deal. He said he had yet to be approached by the new administration for an explanation.

But he defended the country's need for the aircraft.

"Being a member of the United Nations on this continent, South Africa remains the country contributing most to peace missions and we need the transportation capacity," he said.

Military experts have questioned whether the Airbus A400M is the best choice however, when other cheaper heavy lifters can do the same job.

Asked whether the country needed all eight to 14 planes it originally negotiated for, Lekota said the intention had been to stagger their introduction as the country needed them.

A further R1.1bn prepayment has been frozen, pending the outcome of negotiations and a decision by the ultimate arbiter, Zuma.

But Armscor's Thomo said this week the window of opportunity to pull out extended no later than next month.

Thomo's position is now in question. Sisulu was incandescent with rage that he undermined the government's bargaining power by citing the R47bn - an amount he later said was arrived at by including maintenance costs.

Sisulu said it was important for South Africa to retain its credibility as a negotiator in good faith and also to preserve diplomatic relations - all put at risk by Thomo's "blundering".

Airbus Military said the R47bn was "exaggerated", but could not give a figure ahead of the conclusion of the talks.

Armscor's general manager of acquisitions Sipho Mkwanazi said the R47bn included estimates for the full maintenance and life-cycle cost of the planes, spare parts, retention of skills and the SANDF having to pay for private freight charters for six years while it waits for delivery.

Vavi said the deal was the "final death knell" for Cosatu's hopes that the new government would bring a "better life for all in South Africa". The issue will be raised at next month's alliance summit, against a backdrop of already simmering tensions between the ANC and its allies.

"We are saying this is a scandal. It is the second (arms deal) in a row and the culprits are the same. Except this time they are defiantly arrogant... and they are not caring a damn about the controversy created by the first one."

• This article was originally published on page 5 of The Sunday Tribune on October 18, 2009