The arms procurement package has provoked enormous controversies in the last three years. The arguments against the deal can be summarised as follows:

• We don't need the equipment. We are not in danger of fighting a war.
• SANDF personnel do not have the skills to operate the new technology. 
• The money could be better used for poverty alleviation. 
• Generally accepted procurement practices were not followed.
• Low penalties (only 10% of contract price) if suppliers default. 
• Corruption - Senior officials took large bribes to set up different facets of the deal.
• Senior politicians are trying to close down the Heath Unit because it has uncovered corruption involving government

  ECAAR Allegations

(Economists Allied for Arms Reduction) ECAAR's spokesperson, Terry Crawford-Browne, has made some dramatic claims regarding the deal, which he says comes from information gathered by ANC intelligence operatives who were instructed to look into the deal by the ANC whistleblowers.

These include allegations that:

• Former Defence Minster, Joe Modise, took a payment of R10 million for setting up the German submarine contracts

• Links between the awarding of the Cell C contract and the arms deal through Shamin "Chippy" Shaik whose brother, Younis is head of the Cell C consortium and new-generation electronics and smart-card technology which amounts to a conflict of interest.

• It is alleged that the Cell C award was in reciprocity for Saudi Arabian contributions to ANC campaign funding

• Links through the Chairman of Cell C's holding company, Lt Gen Lambert Moloi to Modise (his brother-in-law) to Denel and to Futuristic Business Solutions, one of the prime co-ordinators of the Arms Aquisition Programme

• Involvement of shady characters such as Marc Rich, the American financial fugitive in Switzerland who was one of the leading oil-sanctions busters during the apartheid era; as well as to Special Branch Colonel Alf Oosthuizen who was a perpetrator of apartheid-era atrocities

• Allegations that the German sub-marine contracts were central to the Coega Project near Port Elizabeth and is merely a white elephant comparable to Mossgas.

• Pres Mbeki himself is applying massive political pressure to close down the Heath Unit because it has uncovered corruption involving government ministers and his own brother, Moeletsi Mbeki.

• That the present personnel within the SANDF don't have the skills or knowledge to operate the technology being bought

• That the proposed Conventional Arms Control Bill which has been revoked by parliament was an attempt to provide the State with indemnity against having to disclose any criminal activity by prohibiting public disclosure of allegations such as those made by Patricia de Lille and ECAAR.  This would have invoked a culture of secrecy similar to that of the apartheid era, removing all transparency and accountability to the public or to fellow ministers.There is every indication that the government will try to reintroduce the Bill for tabling again next year

Is the Arms Package a good deal or Not???

In an effort to find out if the Arms procurement package was a good deal or not, we asked defence expert Mr. Helmut Rohmer-Heitman for his assessment of the deal. The SABC asked him to comment on to the following claims: 

As you know the South African government is willing to pay SEK 15 billion for 28 JAS-39 Gripen fighters. Each plane will cost South Africa SEK 535 million.

We have received information from a source questioning the high price, informing us that SAAB's promotion of the JAS-39 Gripen to Brazil has been to a price of SEK 180 million, to Chile SEK 285 million and to the Philippines SEK 280 million for each plane.

The offer to Brazil has been for about 100 planes, to Chile 16-20 planes and the offer to the Philippines has been for 20+ planes.

The difference is substantial. Why should South Africa pay SEK 255 million more than the Philippines for each plane?

Mr. Heitman, a correspondent for the Janes defence Weekly publication, referred to claims made by Mr. Terry Crawford Browne and sent us the following response:

Arms query on Gripens

I speak - write! - under correction, but I do not think that any hard offer has been made to Brazil, Chile or the Phillipines. I do not know where Mr Crawford-Browne claims to get his information, but it seems suspect.

 

That said, three points:

 

1.  There is a vast difference between the so-called "fly away" price of an aircraft on the one hand, and a package cost. The former is the aircraft "as is", with no spare engines or other spares, no engine test beds or avionics test benches, no specialised ground support equipment, no pilot training simulators, no pilot training and no ground crew and technical personnel training, and no support to the local industry to prepare to support the aircraft through a service life of 20 to 30 years. The latter will include all of those things. The difference can be as much as 100% or even more in some cases. The figures that Crawford-Browne mentions in respect of Chile and the Philippines may have been based on a quoted "fly away" cost estimate. The actual contract price would be very much higher. The figure quoted by him in respect of Brazil is too low to even be credible as a fly away cost - unless it was a quote at "fly away" cost for a bare aircraft without the multi-mode radar, the navigation/attack system, the communications system and the electronic warfare system. That would imply that Brazil would be fitting systems acquired from other manufacturers to their aircraft. The final cost of the aircraft in service would then be a lot more than South Africa is paying because of the additional design and integration costs. The bottom line is that one must compare package cost with package cost or fly away price with fly away price. Even then one must know exactly what is in the package and what the basic fly away configuration is (see below).

 

2.  Two apparently similar or even apparently identical aircraft can have very different price tags depending on the model of the engine that is fitted, the type of radar (eg full multi-mode or a simpler system), the navigation/attack system (eg day only or day and night capable), the electronic countermeasures system, etc. It is impossible to make any real comparison without knowing exactly what the aircraft's systems comprise.

 

3.  Having just said that comparisons are very difficult to make, I will now go ahead and make one, albeit in the full knowledge that it is simplistic: Assuming Crawford-Browne's figure of SEK 15 billion is correct, South Africa is paying about US$ 57.6 million per aircraft for the total package. The United Arab Emirates has recently signed a contract for 80 F-16 Block 60s at a price of $ 80 million each. To be fair, that includes some missiles, so one should probably cut that down to $ 70 million each. The F-16 is a  bigger aircraft, but its is also much older in concept and technology, development having started in 1968 and the first aircraft flying in 1974. The first Gripen flew in 1988. The F-16 is also much more difficult and expensive to maintain and less suited to dispersed operations from "austere" airfields, which is something the SAAF's fighters are very likely to have to do if South Africa becomes involved in regional security.

 

The bottom line is that I believe South Africa is getting a good aircraft at a very good price. For my part I would have preferred a larger twin-engine fighter, but that would have taken the cost to over $ 100 million each - a bit outside what the pocket can handle!

 

A long answer to a simple question, but I hope it is of use.

 

To expand on this a bit: South Africa is paying just a little more for four patrol corvettes than the Indian Navy has just paid for one slightly better armed frigate, and is paying less for its ships than Malaysia paid for smaller light frigates that are not as well equipped. The submarines and Hawks are coming in at roughly market prices. I could not evaluate the A-109 price because there have been no recent sales of twin-engine military-standard light utility helicopters. The Lynx offer for the shipborne helicopter is somewhat better than the price obtained by New Zealand for the similar American Seasprite.

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