Treasury awards DSA R192m for A400M work

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Finance Minister Pravin Gordhan has bolstered Denel Saab Aerostructures’ coffers (DSA) with R192 million to help tide it over delays in the Airbus A400M Loadmaster project in which it is a risk-sharing partner.

Page 51 of yesterday’s

Medium Term Budget Policy Statement (MTBPS) awards DSA “R192 million for Airbus’ claim against DSA, subject to verification, for DSA’s failure to meet performance targets as part of the 2004 acquisition of eight A400M aircraft.”

But Business Day reports the Department of Public Enterprises said last night the money was not to pay a penalty but was funding to assist with development work on the A400M.

“DSA had expected to be in a position where the production phase of the contract had commenced in 2008,” the department said.

“However, as a result of the delays in the development of the aircraft, the design phase has been extended. DSA has met its targets … and Airbus is reputedly comfortable with its performance.”

Reports indicate that difficulties with a number of aspects of the 20 billion euro project to build 192 airlifters for nine air forces – including South Africa’s – has delayed the programme between three and five years.

Airbus spokesman Linden Birns confirmed to Business Day that Airbus Military has not invoked any penalties. “On the contrary, Airbus Military has made additional resources available to both its South African partners to help them achieve their targets.”
 

DSA posted a loss of R452.6 million for the year to March, largely because of delays in the A400M programme.

Meanwhile, Business Day also reports Gordhan as saying that Cabinet has “yet to decide whether to cancel its contract” to buy eight of the transport aircraft but that the “decision would be made soon.”

The comment, made at a closed press conference prior to him making his MTBPS speech, apparently contradicts a statement by Cabinet spokesman Themba Maseko last week that Cabinet had decided on the fate of the 837 million euro programme and that defence minister Lindiwe Sisulu would “soon” make an announcement to that effect.

Gordhan’s spokeswoman, Thoraya Pandy says Gordhan went on to say that Cabinet had authorised Sisulu to negotiate a new price and delivery schedule with Airbus Military – necessitated by the programme difficulties – and that she would make an announcement on that “soon”.

Airbus Military and its parent EADS are currently engaging all A400M buyers on the matters of cost and delivery schedules.

The first SA aircraft were to have been delivered next year under the 837 million euro (then R7.4 billion, now R9.6 billion) contract signed in April 2005.

Armscor CEO Sipho Thomo earlier this month caused consternation when he told Parliament the cost of the airlifters, considered vital by some for peacekeeping missions in Africa, had rocketed from R17 billion to R47 billion.



He has yet to explain his figures.