Sisulu gets Airbus to repay R2.9bn

01 July 2011 - 02:03 By ANNA MAJAVU

Defence Minister Lindiwe Sisulu flew to France last week to demand that European aircraft maker Airbus settle a R2.9-billion debt.

Maomela Motau, chairman of state arms company Armscor, told parliament's defence portfolio committee that Sisulu met her French counterpart, Gérard Longue, and won a commitment that the debt would be settled promptly.

Sisulu ended a R30-billion government contract with Airbus in 2009 after repeated delays and price increases.

The deal was for the purchase of eight giant A400M military transporters capable of moving helicopters and tanks.

Airbus was required to refund pre-payments totalling R2.9-billion.

After Airbus rejected Armscor's suggestion that it pay the R2.9-billion in five instalments, Armsordemanded that Airbus pay up within 15 days.

"Airbus was not actually very keen . we met Airbus last week. The delegation to France was headed by the minister of defence and they have indicated to us that the issue was not about the money. Airbus can pay the money overnight if need be, but the issue was to lock us into some sort of a relationship," Motau said.

Motau said Sisulu had met Longuet, who gave an undertaking that Airbus would repay the money.

"We want to believe that the issue of Airbus will be finalised very soon," said Motau.

According to Armscor, Airbus had tried to link the cancellation of the contract to R4-billion in industrial contracts it has with various South African manufacturers, suppliers and research institutions.

"At this late hour, Airbus was trying to link them . trying by all means to lock us into those," said Motau.

He said the contracts were not connected and that companies such as Denel, which has its own separate contracts with Airbus, might have to sue or demand that Airbus honour its contracts.

The Airbus deal was concluded by Mosiuoa Lekota in 2005, when he was defence minister, though he had reportedly been told by the defence force that the planes were not needed.

The spiralling cost of the Airbus aircraft came to light only in 2009 when auditor-general Terence Nombembe identified the R2.9-billion paid by Armscor as "possible irregular expenditure".

When Armscor's former CEO, Sipho Thomo, later appeared before the parliamentary defence committee, he revealed that delivery of the aircraft was four years behind schedule and that the original R17-billion cost had ballooned to R47-billion.