Giant Aircraft Will Boost Military Muscle: A Multibillion Rand Order for the Airbus A400M Troop and Equipment Air Carriers Means SA Can Intervene in Trouble Spots in Sub-Saharan Africa Quickly and Effectively. but There Are Those Who Say the Money Could Have Been Better Used in Other Sectors. Tom Nevin Reports
Nevin, Tom, African Business
The announcement came out of the blue, and it was the clearest signal yet that South Africa has accepted the role of Africa's policeman. In a short statement, the government said it had ordered up to 14 gargantuan, high-tech military carrier aircraft and had entered into a joint warplane building agreement at the same time.
The order for the all-weather, all-terrain Airbus A400M transporters, at about R800m ($135m) apiece, means South Africa, as lynchpin of the African Union's soon-to-be-created peacekeeping apparatus, the African Standby Force, can land a significant force of men and heavy equipment virtually anywhere in sub-Saharan Africa at a moment's notice.
Each aircraft is capable of carrying troops, artillery, tanks, helicopters and field hospitals. Delivery will take place between 2010 and 2014.
The fact that the order was presented to South Africa by the defence ministry as a fait accompli, evoked howls of protest from opposition parties. The price for the 14 carriers is around R11.3bn ($1.9bn) about half this year's defence budget and a quarter of the 2004 government deficit. On accusations that the government had ordered the fleet "by stealth" in that there was no public consultation, that the fleet had not been tendered for and that parliament's defence committee had been ignored, the NGO, Economists Allied for Arms Reduction (ECAAR), rushed to the Cape High Court and obtained an order that prevented the government from signing the deal until all parties had had an opportunity to file the necessary court papers.
The government had earlier claimed that no tender was required because the acquisition was a "unique arrangement", and because "there were no other aircraft with the A400M specifications", according to Ian Phillips, a government spokesman in the transport department.
The legal action was of particular concern to the government as the deal hinged on a December 15 deadline by which time the paperwork was to have been in place and the deal signed. The agreement was only made public on December 9, and a judgement handed down on December 14.
As it transpired, however, the court rejected ECAAR's application on the grounds that it had not been proven that the government had acted irrationally, but Judge Deon van Zyl left the door ajar by ordering the government to pay its own costs and noting that the public was justifiably concerned at South Africa's spending on arms when housing, education and health services needed improvement.
COMPLICATED 'UNIQUE ARRANGEMENT'
The "unique arrangement" referred to by Phillips is a complicated deal put together by Airbus Military in Paris and the South African Department of Transport. In effect, South Africa agreed to buy military aircraft from Airbus to the value of at least R6.5bn ($1.9bn) in exchange for investment, technological knowledge and jobs. The deal, however, goes a lot deeper than commonly applied offset arrangements.
South Africa was also offered the right to participate in the entire A400M programme. In return Airbus wanted a commitment by South Africa to buy a minimum of eight of the aircraft by the end of 2004. As a player in the programme, South African industry would provide parts for the cargo planes.
If South Africa buys 14 aircraft, it would have the right to supply 7.2% of the value of the 194 A400Ms so far scheduled for production. And this is the deal-maker, says the South African government. This will allow the local aerospace industry to further integrate itself into world supply chains and win other contracts.
None of this carried much weight with the programme's detractors. The official opposition, the Democratic Alliance (DA), called for an urgent meeting of the national assembly's defence committee to discuss the matter.
What the DA's shadow defence minister, Rafeek Shah, wanted to know was whether or not the A400M contract was put out to tender, on what basis the defence department requirement was considered urgent in the face of an already stressed budget, if alternative aircraft (such as later C-130 models) had been considered, and why the deal was conducted in secrecy. …