The Ministry of Defence says is Defence Industrial Participation (DIP) portfolio is largely discharged with credits to the value of R18 294 billion awarded as at 31 March 2008. The ministry, in an answer tabled in Parliament, said the total DIP portfolio administered by its Armscor acquisition agency at the same date was R20 465 billion.
“All the DIP and NIP (National IP) contracts were signed during the first half of the year 2000 after the preferred bidders [in the Strategic Defence Package acquisition process] submitted the necessary business plans.
The defence ministry says DIP and NIP “apply to both foreign and domestic companies where the foreign or imported content of the goods to be supplied exceed the industrial participation of US$2 million for the DIP and US$10 million for the NIP.”
DIP and NIP have been variously slammed and praised. Opponents say it adds to the cost of the acquisition while proponents say it assists with economic development while helping offset the price paid.