Scandal of R1.2 billion missing SA satellite

19 January 2014 - 10:20 By JAN-JAN JOUBERT
PIE IN THE SKY: A Kondor-E satellite similar to the one commissioned by South Africa from a Russian company
PIE IN THE SKY: A Kondor-E satellite similar to the one commissioned by South Africa from a Russian company

Does South Africa have a spy in space - or just a costly, secret bungle?

The whereabouts of a spy satellite - commissioned by South Africa from a Russian company for R1.2-billion - remains a mystery, eight years after the deal was struck. There are doubts whether the satellite even exists.

The satellite, a Kondor-E, is of a type often, but not exclusively, used for spying. It can collect radar images - even at night and through cloud cover - of objects as small as a car.

The affair, billed Project Flute and later renamed Consolidated Project Flute, has caused tension at cabinet level. This week, current and former ministers denied any knowledge of the satellite.

The ongoing matter, involving the South African government and Russian company NPO Mashinostroyenia, stems from contract number 710/303/060001, said to have been signed on May 19 2006.

This week saw much ducking and diving amid questions over:

Whether a satellite the Russians launched in June last year for an undisclosed foreign client was the one commissioned by South Africa;

If that was not the "South African" satellite, whether the actual "South African" satellite would ever be launched; and

What exactly the South African government wanted to use the satellite for.

Democratic Alliance MP David Maynier said it seemed "Project Flute" was a secret R1-billion bungle by defence intelligence. "I suspect that Project Flute will turn out to be one of the biggest scandals in South Africa," he said.

"We need to get to the bottom of why we appear to have spent more than R1-billion, financing a foreign company located in Russia, to develop a reconnaissance satellite over which we would have no control, [nor] be allowed to operate [it] from South Africa.

"We also need to get to the bottom of whether there is a reconnaissance satellite in space and, if so, who has control over the product and what systems are in place to protect South African citizens' privacy.

"I am not going to allow Project Flute to be swept under the carpet and will be asking hard questions in parliament. In the end, Project Flute leaves one wondering just how much intelligence there is in defence intelligence," Maynier said.

The exact content of the costly satellite contract has remained a closely guarded secret, but a careful trawl through official documents provides evidence of taxpayers footing the bill for this deal.

In a letter dated January 14 2008, the Russians raised their unhappiness with South Africa's failure to keep its side of the bargain by failing to make the payments. The Russians claim the then minister of defence, Mosiuoa Lekota, had frozen the contract, and implore him to "unfreeze" it.

In a second letter, dated August 19 2011, Lindiwe Sisulu, as minister of defence, supports and raises concerns over the contract, which she claims has since been transferred from her department to the Department of Science and Technology. The letter is addressed to Naledi Pandor as minister for the latter department.

In the letter, Sisulu claims the contract was entered into by Lekota. This could not be verified by the Sunday Times.

Both Sisulu and Pandor refused to provide information this week, referring all questions to secretary of defence Dr Sam Gulube.

Lekota said he had no access to defence chiefs and records to refresh his memory and that it would be unreasonable to expect him to provide reliable replies to "a matter as matured as this one".

He referred questions to the Department of Defence. S pokesma n Siphiwe Dlamini said: "The project you have made inquires about is a classified project and therefore I am unable to respond to your questions, as you would expect me to.

"I can, however, inform you that projects of this nature are audited by the auditor-general office by vetted officials from that office, and such reports are tabled and discussed at the joint standing committee on intelligence."

Brian Dube, spokesman for the Department of State Security, whose remit includes classified projects, said the department "had no comment on the matter".

Despite the bizarre responses and secrets, the existence of Project Flute can be detected in documents in the public domain.

In the 2008 annual report of parliament's joint standing committee on intelligence, it states that it had requested help from the auditor-general to investigate "a sensitive project of defence intelligence" which has "potential serious financial implications for the Department of Defence".

In its 2009 annual report, the committee states that the investigation was finalised and a special report provided to then-president Kgalema Motlanthe. The content has never been shared with the public.

In the same report, the committee includes one sentence about receiving a briefing on Consolidated Project Flute from defence intelligence, although the content remains secret.

The committee, which is parliament's most secretive committee , continues to get away with not having tabled an annual report since 2011 for public use, in clear breach of the Intelligence Oversight Act .

Its current chairman, ANC MP Cecil Burgess, has for months flatly refused to provide the reports or reasons for withholding them.

During last year's heated National Assembly debate on the secrecy bill, senior ANC MP Luwellyn Landers made reference to Lekota's "role in the sorry saga of the Russian satellite". Neither Landers - a member of the intelligence committee when Lekota was minister of defence - nor Lekota was prepared to comment on the issue afterwards.

There was another hint when the Treasury said in its annual budget documents that a steep increase in spending on defence intelligence between 2007 and 2011 was " mainly due to planned investment in and the development of a strategic information collection capability" .