Publication: Issued: Date: 2003-08-20 Reporter: Sapa

New Arms Deal Allegations Emerge



Date 2003-08-20



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New allegations emerged on Wednesday that African Defence Systems (ADS) changed their tender after the closing date, ensuring they secured a sub-contract in the arms deal over CI Systems.

While questioning Auditor-General Shauket Fakie on media allegations of omissions in the final arms deal report, Democratic Alliance MP Nigel Bruce produced a letter showing that ADS was allowed to drop their bid from R32.4-million to R29.64-million.

Parliament's standing committee on public accounts (Scopa) was questioning the AG on claims the final report was "heavily edited" and "doctored".

ADS and CI were competing for a contract to supply the system management system of the combat suite for the South African Navy's four new corvettes.

Asked what action he would take if he found that a company competing for a government tender had changed its tender after the closing date, Fakie said he would report the irregularity.

Bruce then read parts of a letter suggesting that ADS had been allowed to change their tender after the closing date.

Fakie said he had no recollection of the letter but he would look into the matter and then respond.

"This document does come from your office. It has your stamp on it. This can invalidate the deal. Is it an oversight? This is a critical matter to my mind," Bruce said, clearly unhappy with Fakie's response.

Later in the proceedings the auditor-general said ADS had made a mistake with its figures and had been allowed to change their tender.

Speaking to reporters after the hearing, CI MD Richard Young said there had obviously been major collusion to ensure ADS won the sub-contract.

"The letter shows how the price was reduced after the closing date."

He added that a series of letters between the department of defence and ADS showed how the offer price had come down from an original R65-million, and that the company had been given sight of CI's tender.

"If he (Fakie) thinks he is off the hook, I'll tell you what, his problems have only just started," Young said.

Young is suing government over the loss to ADS of supplying both the system management system and the information management system (IMS) parts of the combat suites for the corvettes.

With acknowledgements to Sapa and