Cape Town - The national industrial participation programme, a key part of the R52 billion arms deal, was on track, the national assembly heard yesterday.

It had attracted foreign investment, created exports worth $6 billion - the target was $3.9 billion - and created or retained 2 000 jobs.

In a rowdy, sometimes acrimonious and politicised debate on the arms deal Alec Erwin, the trade and industry minister, and Rob Davies, the chairman of the portfolio committee on trade and industry, denied recent media reports that the programme had not lived up to expectations.

Erwin said the scheme involved two key elements. One was to re-equip the defence force to maintain its integrity, in line with what was affordable. Figures were publicly available in the budget each year "and contrary to predictions, the budget position has not worsened. It has improved," Erwin said.

At the same time, procurements involving imports of more than $10 million, had become part of the programme, where a minimum of 30 percent of the imported content had to be matched by investments in the domestic economy "and they are meeting these objectives", Erwin said.

A key criticism had been whether the performance guarantees would be effective. Erwin's department had taken further legal advice and was satisfied they were "as effective as we can get and are most certainly in line with best practice internationally".

Davies confirmed that the department had submitted updates to parliament on the projects and said they were "well ahead of schedule". There could be 65 000 jobs created in the next 15 years.

There had been "no serious evidence that the scheme was a scam or a sham or a delusion", Davies said.

Erwin said recent press reports had argued that "many of these projects may have come anyway".

"People not familiar with the competitiveness of international investment decisions may think that investment comes easily. Investment does not come easily and ... we value far more highly projects that actually take place, than projects that may have taken place."

Erwin was particularly puzzled by criticism of the gold projects around the Harmony mine in the Free State, with some saying the gold would have been exported anyway.

"We are not just exporting gold, we are exporting beneficiated and processed gold." This included new refining technologies, the training of jewellers and the manufacture of jewellery. It would involve up to $9 million in investments in the next few years. To ignore all this was a specious argument, Erwin said.

With acknowledgements to Lynda Loxton and Business Report.