Big guns, small jobs

2012-03-17 17:25

Foreign companies that benefited from the multibillion-rand arms deal have failed to deliver on their investment promises in the country.

Figures released in Parliament this week show that arms companies invested only a portion of what they promised when they were awarded the contracts to supply arms to South Africa.

Arms companies promised to pump R104 billion into the country’s economy to create 65 000 direct and indirect jobs to offset the cost of the arms transaction.

On Friday, the DA raised questions about the awarding of offset credits to the companies when they had not delivered on their investment commitments.

David Maynier, the DA’s spokesperson on defence, said officials of the department of trade and industry had revealed that about 51 000 jobs had been created, instead of the 65 000 jobs promised as part of the offset programme.

They also revealed that the German Submarine Consortium was given an offset credit for €300 million (R3 billion) for a biopic about Nelson Mandela, which it had not yet produced.

This is while BAE/Saab got an offset credit of $7.2 billion (R55 billion) while they had invested only $203 million.

“There are clearly serious questions about how the arms deal offset credits were awarded, and how the so-called ‘multipliers’ were applied, given the wide variance between the total obligation and the actual investment by each arms deal company,” Maynier said.

However, Trade and Industry Minister Rob Davies said the explanation his department’s officials had given to Parliament on Friday was that the arms companies had earned credits and agreed to do something else outside their line of business, such as empowerment and local sourcing of goods.

These are known as “multipliers”.

Davies said some of the “multipliers” were “fairly large”, saying jobs were created directly and indirectly out of them.

“Whether someone pulled wool over our eyes, we still have to determine. As we improve industrial participation, we will make a number of changes,” he said.

Asked if it was correct to interpret the figures as an indication that the country had been ripped off, Davies said he didn’t want to enter into debates about the “value-judgments” people make.

“The task we have now is to ensure that obligations in terms of the contract are fulfilled,” he said.

In Parliament on Thursday, President Jacob Zuma would not say whether or not he would make
public the report of thecommission of inquiry into the arms deal.

The commission was set up last year to investigate corruption.

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