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Lessons from the arms deal

It was National Treasury official, Roland White who, in 1999, said that whether government enters into the Strategic Defence Procurement Package (commonly known then as the 'arms deal') would depend on its 'appetite for risk'.

Despite several warnings, the deal went ahead with financial and governance consequences which South Africa is still paying for heavily today. The arms deal and associated corruption tested all our democratic institutions as politicians sought to evade responsibility for the deal and its effects.

The way in which the arms deal was dealt with was indeed a 'litmus test' for our democracy and the strength of its institutions, as the Institute for Democracy in Africa (Idasa) said at the time.

The stories are legion and the arms deal still remains the subject of an inquiry despite the fact that no-one really believes the Seriti Commission into the arms deal will bring us any closer to the truth even after all these years.

While allegations of bribery and corruption have swirled for years, most of the most senior politicians seem to have escaped having to account for the corruption associated with the arms deal.

President Jacob Zuma himself ascended to the very highest office even as many believe Zuma was more than fortunate to escape being charged with fraud and corruption arising out of the deal.

So one might think that successive governments learn the lessons of the past.

In his 2014 State of the Nation address President Zuma again underlined the energy crisis facing South Africa. As the National Development Plan (NDP) does, Zuma called for a 'radical transformation of the energy sector'. An energy security cabinet sub-committee would be responsible for the oversight, co-ordination and direction of activities for the energy sector. The President, who chairs the energy security cabinet sub-committee himself, is therefore leading decision-making processes.

Interestingly, too, the Electricity Regulations of 2011 exclude Eskom from decisions on nuclear procurement and gives the Minister of Energy significant discretion to define all energy procurement processes, yet it is unclear quite what instrument then regulates nuclear procurement.

The Integrated Resource Plan (IRP) is the primary policy guide and describes a future energy mix that includes, but is not limited to, nuclear energy. It is unclear whether the latest IRP (the plan is renewed every two years) has been approved by Cabinet and what its status is.

But, aside from the IRP, the NDP has a clear commitment to an 'energy mix' which would include renewable energy sources.

Government's dogged pursuit of nuclear is therefore confusing to say the least. Recently, Zuma undertook a trip to Russia, which was virtually shrouded in secrecy. Government spokesperson Mac Maharaj said the President would be 'discussing nuclear energy'.

This past week what seems like a framework agreement was signed in Vienna between South Africa and Russia's state-owned nuclear company, Rosatom. "The Agreement lays the foundation for the large-scale nuclear power plant (NPP) procurement and development program of South Africa based on the construction in RSA of new nuclear power plants with Russian VVER reactors with total installed capacity of up to 9,6 GW (up to 8 NPP units)," said a joint statement published on Rosatom's website.

Minister of Energy, Tina Joemat-Pettersson, has said that the deal will create thousands of jobs and also 'place a considerable order to local industrial enterprises worth at least $10 billion'.

Apparently though, according to energy officials, there will be further contracts and sub-contracts signed as a result of various procurement processes.

Even as government goes ahead with the nuclear option, there has, however, been no substantive debate on the energy mix required for South Africa or the cost or safety of the nuclear option in Parliament despite calls by Democratic Alliance MP, Lance Greyling, for such a debate and oversight. The Democratic Alliance has now given Joemat-Pettersson 10 days to furnish Parliament with the signed agreement between South Africa and Russia.

In terms of s 217 of the Constitution all procurement must be transparent and open. It is a well-known fact that nuclear is a more expensive option, prone to cost over-runs which are eventually recouped from citizens

Whether this will be forthcoming remains to be seen.

It is clear, however, that the South African public via Parliament or any other fora have no meaningful information regarding the deal or, crucially, who will finance the cost of the deal in the future. There are various pricing models that might be able to be invoked, yet information regarding these must be placed in the public domain, surely? The procurement processes which will see local industrial enterprises involved will also need to be transparent, with criteria which are open for scrutiny.

One of the lessons of the arms deal was that procurement criteria were selective, changed halfway through and in other cases deviated from.

South Africa cannot afford to make the same mistakes again. Long after Zuma and Joemat-Pettersson have departed the political scene, the citizens of South Africa will be paying for this deal.

Already we have more questions than answers. The Council for the Advancement of the South African Constitution (Casac) has written to Joemat-Pettersson requesting a copy of the South Africa-Russia agreement and expressed concern regarding a lack of transparency regarding the agreement.

South Africans have the right to know the content of agreements signed in our name and which will bind us into the future. Let us hope that our government will not sell us down the river and that we have learned the lessons of the arms deal once and for all.

Civil society and Parliament will need to remain vigilant to ensure that citizens are receiving value for money and that the job creation which ought to arise from the deal does not simply mean jobs and contracts for those connected to powerful decision-makers and associates of the ruling party.

Judith February is a senior associate at the Institute for Security Studies (ISS).

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