SA conned in arms deal, says critic

2014-10-09 19:31
The commission is investigating allegations of corruption in the controversial multi-billion rand arms deal. (AFP)

The commission is investigating allegations of corruption in the controversial multi-billion rand arms deal. (AFP)

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Pretoria - South Africa was duped in the controversial 1999 arms deal, the Seriti Commission of Inquiry heard on Thursday.

"Instead of job creation, the whole scheme of offsets which drove the arms acquisition had huge negative consequences for South Africa," arms deal critic Terry Crawford-Browne told the inquiry's hearings in Pretoria.

"If we were talking about getting R110bn and we got only R6bn instead, we were conned. The negative consequences that flowed from this scheme had a major economic impact."

He said former defence minister Mosiuoa Lekota and trade and industry minister Rob Davies had conceded that the spin-offs did not materialise.

"There are media reports of minister Davies reporting to Parliament. Prior to that, Mr Lekota conceded that instead of the 65 000 jobs, we were going to get about 13 000 jobs at best," said Crawford-Browne.

"The whole expectations have been scaled back since 1999 when the media and civil society started challenging DTI [the department of trade and industry] to produce evidence of the offsets."

Offsets

Crawford-Browne was cross-examined by Isaac Chowe, for the DTI.

"I am aware of your background as a banker. If a state is asking some companies in its country, in your view, does is mean those investments must immediately give spin-offs or some may take time to realise?" Chowe asked.

Crawford-Browne said acceptable practice was that the investments should be "a stand-alone issue".

"It's not about an arrangement that you scratch my back and I also scratch yours. The offsets were unconstitutional but they also became fraudulent," he said.

Chowe said there was no official declaration that the offsets were not in line with the Constitution.

"One can only come up with an argument of unconstitutionality after taking steps by either bringing an application to the relevant court or maybe through Parliament," said Chowe.

Crawford-Browne said he was hoping the inquiry led by Judge Willie Seriti would "inform the president accordingly".

"The tragedy is that this has been something that has been ongoing since the defence review, when it was pointed out that this was unconstitutional.

"The point was made back in the 1990s. Everyone thought they could brush it aside," said Crawford-Browne.

Chowe said the DTI believed the promised benefits at the acquisition of the military hardware had indeed materialised.

Crawford-Browne maintained that the offsets were hugely inflated and never saw the light of day.

"The prime example is the submarine acquisition offset, the stainless steel plant which never materialised. It was cancelled within months and replaced by other peculiar projects including a first condom factory. The offsets didn't materialise," he said.

The commission was appointed by President Jacob Zuma three years ago to investigate alleged corruption in the multi-billion-rand arms procurement deal in 1999.

Government acquired, among other hardware, 26 Gripen fighter aircraft and 24 Hawk lead-in fighter trainer aircraft for the air force, and frigates and submarines for the navy.

Read more on:    arms deal

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