Defence Intelligence spy satellite saga continues

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South Africa’s defence intelligence community is still on track to acquire a military satellite at a cost of over R1 billion.

This, opposition Democratic Alliance (DA) party shadow defence minister David Maynier said, was revealed to a Defence and Military Veterans Portfolio Committee meeting by Dr Sam Gulube, Secretary for Defence.
“A contract which has been cancelled and then reinstated, was a contract to develop a ‘military satellite’ and this contract was now on track,” Maynier said, adding this “officially confirmed for the first time the contract to develop a military satellite is ongoing”.

He has been investigating the satellite acquisition project for more than five years and has consistently come up against brick walls in his efforts to find out what the status of Project Flute is.

In May 2006 a contract was entered into between Defence Intelligence and Russian company, NPO Mashinostroyenia to develop a Kondor-E synthetic aperture radar satellite.
“The top secret project was called Project Flute and later Consolidated Project Flute.
“We do not have all the facts but know it was to develop the synthetic aperture radar satellite capable of seeing at night and through cloud cover at a cost of about R1.2 billion. The main driver is believed to have been now retired lieutenant general ‘Mojo’ Motau, who was head of Defence Intelligence when the contract was signed in May 2006.”

According to Maynier many thought the project was cancelled following a bungled procurement process by Defence Intelligence.
“At a Portfolio Committee meeting on October 22 at Parliament the Secretary for Defence, confirmed a reference in the Special Defence Account Annual Financial Statements for the Year ended 2014 to a contract that had been cancelled and then reinstated, referred to a contract for a ‘military satellite’; and the contract for the ‘military satellite’ was now on track.
“The contract, which he confirmed referred to a contract for a military satellite, was cited in the Special Defence Account Annual Financial Statements for the Year ended 2014 for fruitless and wasteful expenditure, totalling R212 749 000.
“It is not possible to determine, given the breakdown of the fruitless and wasteful expenditure, whether the R212 749 000 was incurred as a result of the contract for the military satellite, alone.
“However, an analysis of the Special Defence Account’s annual financial statements, makes it possible to determine the contract for the military satellite incurred R212 714 000 worth of fruitless and wasteful expenditure between the 2010/11 and 2013/14 financial years,” Maynier said.

According to him, Gulube claimed the fruitless and wasteful expenditure was due to exchange rate fluctuations.
“This may be true for the R2 314 000 worth of fruitless and wasteful expenditure incurred in the 2013/14 financial year. However, it is highly likely, given the large amount of fruitless and wasteful expenditure, which ranges between R110 414 000 and R2 314 000 per year, that the contract for the military satellite was reinstated at a higher contract price.
“This means that the total contract price for Defence Intelligence’s Russian Kondor-E spy satellite could be as much as R2.4 billion,” Maynier said.