State payment to Denel-Saab is not for a penalty
October 30, 2009
The Airbus company which was contracted to supply eight military heavy-lift A400M planes to the SA air force insisted on Friday that it has not invoked any penalties against its South African manufacturing partner Denel-Saab Aerostructures, despite what the National Treasury said this week.
On Tuesday, when the Minister of Finance, Pravin Gordhan, tabled the adjusted estimates of national expenditure for this year in the National Assembly, a sum of R191.9 million was listed as being paid to the Department of Public Enterprises.
It was described as having been "allocated for the Denel Saab Aerostructures claim in terms of the indemnity provided by government for the A400M contracts".
Spokesperson for the sub-Saharan arm of Airbus, Linden Burns, said: "I can confirm that Airbus Military has not invoked any penalties against its South African industrial partners (Denel-Saab Aerostructures and Aerosud).
"On the contrary, it has made additional resources available to both companies enabling them to achieve their performance targets."
Curiously the payment to the DPE is listed in a table headed: "Unforeseeable and unavoidable expenditure".
This is the virtually the only criterion on which adjustments to the expenditure proposed in the February budget and approved by Parliamentary vote may be made.
But Lana Kinley, the chief executive of the Denel-Saab company, declared on Friday that it was neither unforeseen nor unavoidable.
The payment she said was indeed not for a penalty claim, but was intended for the purchase of a piece of equipment for the manufacture of the specialised parts needed for the wing-to-fuselage fairings which is the company's principal part of the project.
"This is basically project finance," she said.
"We expected to be in production phase by 2008. The project has been delayed, so we are continuing to work on the development of the aircraft." - I-Net Bridge
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