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  4. SA terminate $5.4bn Airbus deal

This topic has no replies. This topic was posted on 06-11-2009 07:13.

SA terminate $5.4bn Airbus deal

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  1. Posted on Friday 6 November 2009 - 12:29
    Mernat
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    Mernat Mairfakurewa, AfricaNews reporter in Johannesburg, South Africa
    The South Africa government has terminated the US$5.4 billion Airbus A400M military aircraft deal, cabinet announced on Thursday. The decision which was taken two weeks ago but was only made public Thursday would have seen the southern African country acquire eight Airbus A400 military aircrafts.
    airbus 400m
    In terminating the contract, cabinet cited delays in the delivery of the order and the continued escalation of costs, which the government sees as a burden on the tax payer.
    Initial costs of acquiring the eight military airlift planes was R17billion, (just over US$2 billion) but had since ballooned to around R40billion (Over US$5 billion).

    In a statement to the media government spokesperson Themba Maseko said, "The cost escalation would have placed an unaffordable burden on the taxpayer at a time when the national fiscus is under pressure due to the economic down turn".

    Maseko said there was no doubt that the cancellation of the contract would impact on the country’s peacekeeping missions in Africa.

    Lindiwe Sisulu the Minister of Defence said there was need by the defence forces to upgrade its transport fleet. “We have terminated the contract with Airbus but we have not terminated our quest to ensure we have the necessary capabilities. That is very clear.

    "We have as one of our priorities the acquisition of strategic military air transport capability," Minister said.

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