R70 000 000 000

2011-04-09 19:59

The final bill South African taxpayers had to carry for the controversial arms deal far exceeds what the government has been telling the public.

City Press has obtained exclusive new research to be published in a forthcoming book by former ANC MP and arms deal activist Andrew Feinstein that shows the country would have paid more than R70 billion to buy warships, fighter jets and other equipment by the end of this year.

Research conducted by Feinstein and the project’s lead researcher, ­author Paul Holden, further shows:

» Until 2008 the country had spent R7.63 on the arms deal for every R1 spent on our HIV/Aids programme;

» Comparatively, until the end of 2008 (when the major payments on the arms deal ended) the government spent R8.7 billion on its HIV/Aids programme and R41 billion on housing. In the same period it paid R64 billion to defence companies.

Titled “The Shadow World – Inside the Global Arms Trade”, Feinstein’s new book comes after the publication of “After the Party”, his book on the arms deal and his resignation from Parliament and the ANC in 2001 in protest at the deal.

Feinstein, who now lives in London and is an arms industry activist and researcher, was instrumental in the appointment of a multi-agency probe into the arms deal by Parliament.

The arms deal, which was announced by then former deputy president Thabo Mbeki in 1997, has dogged South African politics, specifically the ANC, for more than a decade.

Before he became president, Jacob Zuma was charged for receiving bribes from French arms firm Thales, which received a subcontract in the frigates deal, and Mbeki was accused of hindering the multi-agency investigation by excluding the former Heath Special Investigating Unit.

Former ANC chief whip Tony Yengeni was jailed for failing to declare a discount he received on a Mercedes-Benz 4x4 from arms deal bidder DaimlerChrysler and Zuma’s former financial adviser, Schabir Shaik, was convicted of corruption for facilitating the bribes for Zuma from Thales.

Holden told City Press the figure of R70 billion was calculated by using the defence department’s budget vote of 2008, which provided a breakdown of costs to date as well as projected future costs of the deal until this year.

“At the time, the stated cost to 2008 was R43 billion, with a further R4.3 billion to be spent by 2011. Unfortunately, the R4.3 billion is not set in stone due to exchange rate fluctuations,” Holden said. Taking this into consideration, the cost was adjusted to R47.8 billion by this year.

But, says Holden, this is only the “stated cost” and didn’t include the series of “hidden costs associated with the deal ... in particular, this ­figure did not include the financing costs.”

The government has not provided an overall figure for financing costs, but the report by the Joint Investigation Team into the arms deal and a draft Auditor-General report stated that the financing costs totalled roughly 49% of the deal’s total stated cost.

“Adding 49% of R47.8 billion to 2011 gives us a figure of just over R71 billion,” Holden says.

Defence Minister Lindiwe Sisulu told Parliament in January the deal will cost a total of R47.2 billion, but this excluded the financing costs.

And, says Holden, the total amount can still increase if the value of the maintenance contracts for the jets, ships, submarines and helicopters are calculated.

“Taking this into account, we can see why the defence budget has been creaking so much recently.”

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