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South African Broadcasting Corporation Copyright ©
2000 - 2005 SABC |
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What does R30
billion get you?
Cabinet made an announcement in September
1999 to purchase the following military equipment:
- Nine dual-seater Gripen and twelve Hawk
Aircraft from British Aerospace/SAAB to replace the current
Cheetah and the Impala Aircraft. A further option has been
taken on the balance of the 12 Hawks and 19 single-seater
Gripens.
- Four Patrol Corvettes from the German
Frigate Consortium to replace the present ageing strike
crafts, which are more than 30 years old.
- Thirty light utility helicopters from
the Italian helicopter manufacturer, Augusta, which will
replace the Allouette helicopters which have been in service
in the air force for over 40 years.
- Three submarines from the German
Submarine Consortium, which will replace the ageing Daphne
submarines, which have been in service in the navy for more
than 30 years.
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The cost of the equipment package is R21.3
billion over the next 8 years. If the option to procure
additional equipment is exercised, the total equipment cost will
rise by R8.5 billion to R29.9 billion over 12 years. The options
must be exercised by not later than the year 2004.
The cost of R21.3 billion includes all statutory costs like VAT,
custom duties, freight, export credit guarantees and programme
management. This compares with the estimate last November of a
costs of R31 billion, which included equipment cost of R29.7
billion, together with provisions for price escalation and the
cost of financial cover required.
The conversion of 30% of the original contract value into
options ensures that the SANDF can obtain the required
equipment, as needed, taking full advantage of the excellent
financing and industrial participation terms negotiated but
without creating immediate fiscal pressures. Should the South
African government decide not to take the outstanding equipment,
it will not face any penalties or costs of cancelling the
options.
Cabinet is fully satisfied regarding the offset arrangements
attached to this package, which will benefit the economy and
advance the socio-economic interests of the country.
The results of this whole process is an affordable defence
package combined with an industrial and economic investment
package spanning a variety of industrial sectors and
under-pinning the government's industrial strategy.
Issued by GCIS, 15 September 1999 |
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