Few of promised arms deal jobs exist - probe

2014-03-30 15:36
Willie Seriti (File, Beeld)

Willie Seriti (File, Beeld)

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Johannesburg - An electrical manufacturing firm that doesn’t exist, a litany of bankrupt companies and a fraction of the jobs promised.

That’s the legacy of the arms deal’s disastrous offset projects.

City Press visited 20 of the projects and businesses created as part of the offset deals with five international arms companies – investment projects in exchange for billions spent on new military hardware.

We chose companies on the list that promised a higher number of jobs and were funded by major arms companies.

In the course of City Press visits, we also found that a number of companies created in terms of the offsets had been liquidated, sold or had apparently disappeared.

One of these was TTS Electronics, a company that was supposed to have created 150 jobs.

However, its listed address in the Benoni suburb of Northmead is an unassuming family home.

Another small business is run from the premises and employees said through the gate intercom that they had operated there "for years" and had never heard of TTS.

The man who answered the doorbell said there was no way a staff ­complement of 150 people could fit inside the house.

The report says that TTS, which was supposed to develop and ­manufacture electrical goods for export, was established with an ­investment of R1.2m from BAE Systems.

Repeated attempts to get comment from TTS were unsuccessful.

Kgwanyape Energy Solutions (KES) received $12m (R127m) from the Agusta light utility helicopter deal, according to the DTI report.

However, its offices at the Persequor Technopark near Pretoria are empty and deserted. The property is covered with overgrown grass and the parking lot is empty. The company was supposed to have manufactured energy-saving devices.

When City Press arrived last week, there was not a soul to be seen.

The gates were fastened with a rusted padlock. Employees at neighbouring businesses said they had not seen anyone there for months.

A neighbouring company said it had wanted to buy the premises, but the offer was declined.

Director Hassiem Salie said that KES was still operating and mainly ­recruited workers from the National Youth Development Agency.

“If you go there next week, you’ll find it operating,” he said.

Flextech shut down two years ago.

Employees at Trimotive, the company that now occupies the premises, said the company quietly shut down in ­December 2012.

When its workers returned the next month, they found that they no longer had jobs.

The DTI report states that the company, based in ­Silverton, Pretoria, was created with £5.2 million from AgustaWestland.

Agusta was to have expanded Flextech’s mechanical cable assembly plant to create the 1 800 jobs.

Salie said that Flextech had not closed shop.

He said they had moved the premises to Silverton, but would not divulge where, as the last-known premises were in the same area.

“We are rebuilding after losing a couple of projects and we have a staff component of 50 now,” he said.

Trade and Industry Minister Rob Davies spoke to City Press on Thursday and said his department had made significant changes to the policies governing any offset deals struck in future with international companies.

He also said if the arms dealers had not delivered on their promises, his department would still "expect" them to do so.

Read more on:    bae systems  |  johannesburg  |  arms deal
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