ARMS CONTRACT COSTS NEARLY DOUBLE - NOW R55 BILLION
The Defence Force's Strategic Defence Package will be costing the taxpayer R55,086 billion, nearly double as much as the initial R30 billion at the time which the contracts had been concluded in 1998. In 2000 Cabinet was informed that the arms contract would, according to projections cost R43,828 billion but it is at present R55,086 billion. The interest on the loan alone is at present R7,6 billion. These amounts were officially released by the Minister of Defence following a question of Pieter Groenewald of the Freedom Front Plus in Parliament.
"The arms contract now costs nearly R25 billion more than what had been foreseen and could still increase further. That in itself is very disconcerting but what is more worrying is that South Africa is sitting with billions worth of new weaponry but does not have the manpower capabilities to utilise it fully operationally. Highly sophisticated weaponry such as the Grippen fighter jets were purchased but there is no money available to allow existing fighter jets to be airborne and pilots are leaving the air force.
We purchased submarines, but only one is operational and one has been in the dry docks since 2006 for maintenance until 2013. It is clear that the public was not fully informed about the final costs of the purchasing programme and is not receiving value for its taxes," Mr. Pieter Groenewald, chief spokesperson on Defence for the FF Plus said.
According to the reply of the minister, the expected costs without the interest on the loan will amount to R47,225 billion and will be once again updated in October.
REPLY OF THE MINISTER:
NATIONAL ASSEMBLY QUESTION - QUESTION 1169
Mr P J Groenewald (FF Plus) to ask the Minister of Defence and Military Veterans
(1) With reference to her answer to question 2768 on 17 December 2010, (a) what was the cost of financing the strategic defence package, (b) what was the total cost of the weaponry and (c) what has the interest amounted to so far;
(2) how much the costs of the project (a) have amounted to up to now and (b) are expected to total after completion;
(3) whether she will make a statement on the matter? NW1292E
REPLY:
(1) (a) The cost of financing the Strategic Defence Package was R 42, 362,053,814.
(b) Weaponry is an integral part of the SDP's organic command, control fire and control suites, it is included in the total cost per platform. The total ceiling approved by the National Treasury is R 47,225,627,631.
(c) The Interest on Arms Procurement Loan Facility (APLF) for the Strategic Defence Package so far amounted to R 7,860,569,013 and it is not included in the total ceiling mentioned in (1)(b) above.
(2) (a) The Strategic Defence Packages are executed within the allocated funding approved by the National Treasury. The costs of the project have amounted to R 42, 362,053,814.
(b) The costs of the project expected to total after completion is R 47,225,627.631, and it is updated by the National Treasury annually during October of each year.
(3) Not at this stage.
NATIONAL ASSEMBLY-QUESTION 1405 - DATE OF PUBLICATION: FRIDAY, 22 AUGUST 2008
INTERNAL QUESTION PAPER NO.: 24-2008
MR P J GROENEWALD (FF PLUS) TO ASK THE MINISTER OF DEFENCE
1. What (a) was the initial projection in respect of the sum which the total arms acquisition would amount to at final delivery, (b) does the total arms acquisition amount to up to now, (c) acquisitions to date remain outstanding and (d) are the projected costs for the finalization of the complete programme;
2. whether he will make a statement on the matter?
-------ooo0ooo------- NW2144E
REPLY
1. (a) The contract value for the Strategic Defence Package program at the time of contracting, amounted to R30.049 billion (in 1998 Rand value). During 2000, at the commencement date, it was reported to Cabinet that the projection in respect of the sum, which the total arms acquisition would amount to until completion of all contractual commitments, was R43.828 billion, based on a projection of the fluctuations in Rate of Exchange at the time.
(b) To date, R36.114 billion has been spent on the Strategic Arms Acquisition program.
(c) The 2008 projection of the outstanding amount until completion of the entire SDP programme, is R 11.411 billion. Programs that are not completed yet, are the ALFA (Gripen aircraft), LIFT (Hawk aircraft) and LUH (Agusta A109 helicopters) programs. The submarines and Corvette programs are for all intents and purposes complete except for some outstanding funding commitments liable on logistics.
(d) The 2008 projection for the total cost to completion of the SDP programme is R47.525 billion.
2. No.
Statement issued by Mr. Pieter Groenewald, FF Plus chief spokesperson: Defence, June 1 2011
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