Three cabinet ministers have strongly rejected reports and "insinuations" that government misled the public on the cost of South Africa's controversial multi-billion rand arms deal. They also again rejected suggestions that there may have been undue influence involved in the awarding of prime contracts associated with the deal. 

Finance Minister Trevor Manuel was at pains to explain to parliament's watchdog public accounts committee (Scopa) that, like any long term financing programme, the cost on the day of signing should be viewed as the contract price. This was $7,8-billion, and not the R43,8-billion referred to in the media and mentioned in Scopa's report to the National Assembly. 

'Scopa recommended a multi-agency probe into the deal' 

Manuel, Trade and Industry Minister Alec Erwin and Defence Minister Mosiuoa Lekota appeared before the committee to explain their criticism of its interim report to parliament. 

Along with Public Enterprises Minister Jeff Radebe, the four told a press conference in January that the committee was incompetent and irresponsible, and did not understand how arms deals worked. In its report, Scopa recommended a multi-agency probe into the arms procurement package. 

The deal has been clouded in controversy following allegations of corruption which prompted a special audit by Auditor-General Shauket Fakie. "If we had had cash on the day of the contract, we would have paid R30,3-billion," Manuel said. 

Afro-pessimists believed that 'Africans are corrupt' 

The cost would be higher once all exchange rate, interest and contract escalation fluctuations of the original price were calculated over the entire period of the deal. "The minute you bring in extraneous issues into the calculation, you are distorting the point," he said. 

Scopa's report, adopted by the National Assembly in November last year, said it had become clear that cabinet omitted certain cost implications which would significantly add to the State's commitment. By September 2000, the cost of the package had risen to R43,8-billion. 

Manuel said an impression had been created, incorrectly, that the cost had suddenly escalated. He rejected the impression that the public had been misled. Government was confident that the best financing deal was negotiated. 

Scopa's chairperson, Gavin Woods, said it was never the committee's intention to insinuate cabinet had lied about the cost of the deal. 

Earlier, the committee appeared to reach a stand-off when Woods and the ministers accused each other of failing to adequately consult the other party before making their opinions public. 

Erwin said Scopa had failed to clarify certain issues with government before compiling its report to the National Assembly, despite an offer by the ministers to brief Scopa. 

Woods criticised the ministers for not briefing the committee before its press briefing in January. 

Committee members also expressed concern that there were inadequate safeguards in the contract to prevent conflicts of interest. 

Erwin said individuals could not unduly influence the awarding of contracts in the arms deal because there were built-in safeguards.

"It is the view of the Cabinet committee that (because of) the magnitude of the deal and the nature of the prime contracts, it is not possible for individuals in any influential or decisive way to swing these deals." 

The concern was first expressed by Fakie in his special review of the deal. Erwin said the cabinet committee involved in the arms deal was satisfied "that we've taken sufficient precautions". 

The question was first raised after it came to light that the government's chief procurement officer, Chippy Shaik, had relatives who worked for one of the successful prime contractor, ADS. Shaik's brother, Shabir, is a director of ADS. His wife, Zarina, works as a marketing executive for the company. 

Reacting to Erwin, Woods (IFP) replied: "Scopa can't simply say that because the final stage decision-makers are beyond reproach, we have to just assume that there could not be any manipulation earlier on." 

"We have to check this out. These are genuine issues of concern. We are not accusing anybody, but we are saying these are enough and we need to note that in our report." 

Lekota effectively accused the committee of Afro-pessimism because it called for the probe into deal without first substantiating claims of corruption. He said Afro-pessimists believed that "Africans are corrupt" and that "South Africa, because it is run by blacks, will collapse". 

"We object to a committee of our parliament, which has not as yet established evidence that we acted inappropriately, proceeding from that foundation. 

"It's wrong," he told MPs. 

Lekota also said the country "was the richer" for what the executive had undertaken. 

Scopa is expected to discuss the ministers' input on Wednesday with the view to compiling a second interim report to be submitted to the national assembly. - Sapa 

With acknowledgement to Sapa and Independent Online.