Taxpayers foot R70bn bill

By the end of the year, South Africa's arms deal will have cost taxpayers R70 billion, City Press reported on Sunday.

This exceeded what government had been telling the public.

New information obtained was being published in a forthcoming book by former ANC MP and arms deal activist Andrew Feinstein showed that the country paid more than R70-billion to buy warships, fighter jets and other arms equipment.

Lead researcher on the book, Paul Holden, told the newspaper that the figure was calculated by using the defence department's budget vote of 2008, which provided a breakdown of costs to date, as well as projected future costs of the deal until 2011.

Cost adjustments

"At the time, the stated cost to 2008 was R43-billion, with a further R4.3-billion to be sent by 2011.

"Unfortunately, the R4.3-billion is not set in stone due to exchange rate fluctuations," Holden said.

Taking this into consideration, the cost was adjusted to R47.8-billion by this year.

Holden said this was only the "stated cost" and did not include the series of "hidden costs associated with the particular, this figure did not include the financing costs.

Defence budget 'creaking'

In January Defence Minister Lindiwe Sisulu told parliament that the deal would cost a total of R47.2-billion but this excluded the financing costs.

Holden said the total amount could still increase if the value of the maintenance contracts for the jets, ships, submarines and helicopters were calculated.

"Taking this into account, we can see why the defence budget has been creaking so much recently," he said.

Sisulu's department was not immediately available for comment.







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