Publication: Mail and Guardian Issued: Date: 2003-08-15 Reporter: Sam Sole

Shaik 'Altered' Tender Criteria



Mail and Guardian

Date 2003-08-15


Sam Sole

Web Link


New evidence of interference in the selection process for South Africa's controversial arms deal has emerged from documents recently obtained under access to information legislation.

The evidence again highlights the questionable role of former Department of Defence chief of acquisition Shamin "Chippy" Shaik - and of undisclosed political considerations that disadvantaged some bidders to the benefit of French companies.

It also shows that, contrary to formal government statements, the government was intimately involved in the selection of some sub-contractors and not just in choosing the four main suppliers of fighter aircraft, ships, submarines and helicopters.

Documents released to South African defence contractor Richard Young - who lost a major subcontract to French company Detexis - show that Shaik unilaterally changed the criteria for the evaluation of bids to supply the engines for 30 military helicopters.

The documents, including testimony under oath by Armscor CEO Sipho Thomo, were disclosed in terms of Young's successful court challenge under the Public Access to Information Act.

In his evidence Thomo confirmed that during or after the evaluation process for the helicopter engines, Shaik had changed the evaluation system.

Notes by members of the auditor general's team that investigated the arms deal stated that the changes made by Shaik affected the "high level weightings" of the evaluation criteria and that this was a "deviation from policy".

However, in the final report on the arms deal, no mention was made of this intervention, which Thomo confirmed was not in accordance with the procedure agreed by the helicopter project control board, the body responsible for the selection process.

The Canadian arm of Pratt & Whitney was bidding against the Franco-Italian Turbomeca. Evidence shows the South African Air Force (SAAF) strongly preferred the Pratt & Whitney engine, which was also R19-million cheaper. The SAAF regarded the Turbomeca as a high-risk, untested engine.

However, Shaik and former Armscor CEO Llew Swan supported the Turbomeca bid.

Thomo said he believed political considerations came to the fore.

He told investigators: "At that stage, in 1999, there was an issue, a consideration which would not appear on the value system. That consideration was at that stage we were not doing business with America."

But, as the investigators pointed out, the Pratt & Whitney bid came from the Canadian arm of the company and was backed by the Canadian government.

In addition, by mid-1999, when the decision was taken, the United States dispute with Armscor over apartheid-era sanctions violations had already been resolved.

Nevertheless, it appears Shaik and Swan insisted on having it minuted that: "The strategic issues, as depicted in the value system [for selection], are technical and that the politicians could possibly apply national strategic issues that may differ from the military appreciation."

In the end, according to these minutes, the decision was referred to the Cabinet, which apparently selected Turbomeca because of its long association with state arms company Denel.

Fifty-one percent of Denel's aero-engine division was last year sold - at a loss of R82-million - to Turbomeca for R30-million.

The process that emerges from the documents released to Young is a far cry from the picture painted by the government, which has previously insisted that the government did not get involved in subcontracts.

More documents suggest the need to give the French a bigger piece of the arms deal pie may have also played a role in the Cabinet's decision.

This emerges from an earlier draft of the arms deal report in which investigators were probing the de-selection of Young's naval combat communication system in favour of a French rival.

The draft states: "A witness also testified that the Joint Project Team members were informed by Rear-Admiral Kamerman that an instruction had been received from higher command to increase the French content of the combat suite.

"Although the witness appeared to be credible, no corroboration could be found for his allegations."

This information is one of a growing number of items that were edited out of the final draft of the arms report, but which are now emerging as the auditor general releases earlier drafts to Young - a process that is as yet incomplete.

Later this month Parliament is due to debate allegations that the final draft was "heavily edited" by Auditor General Shauket Fakie.

One key excision that has emerged was a section of the report entitled "Inaccurate information supplied to the subcommittee of cabinet ministers".

Although this section has even been deleted from the draft supplied to Young, the context suggests the draft was referring to a presentation in which Cabinet ministers were told that the combat communication system tendered by Young's company was considered "high risk" by the Department of Defence.

The draft report commented: "This statement is contrary to the evidence of all Naval and Armscor personnel who testified and to all documents made available to us."

Fakie has denied making material changes, but this week refused to respond to specific questions posed by the M&G.

In a statement he said: "Unfortunately, I cannot respond to your questions for the reason that litigation is still pending about the matter, as such it is sub judice."

With acknowledgements to Sam Sole and the Mail & Guardian.