Defence to gobble an extra R3,5bn

An extra R3,5bn over the next three years, mostly to pay for SA's order of eight new-generation Airbus strategic air transporters, the A400M, is the main reason behind the faster-than-planned rise in the defence budget. In the next fiscal year the treasury plans to spend R26bn on defence, an 8,6% increase on the current year, which will amount to about 4,8% of allocated spending.

Over the three fiscal years to the end of the current one, defence spending rose by an average of 5,2% a year. However, the next three years will see an annual average rise of 6,2% in spending. The total cost of SA's A400M project will be R15,34bn, according to the treasury. This makes it more expensive than any of the individual arms deals since 1994 except that for the Gripen fighters. Spending on the A400M fleet will peak in the 2012-13 fiscal year and come to an end in the 2014-2015 fiscal year.

The eight A400Ms that SA will acquire by about 2015 will more than double the air force's airlift capacity, allowing the country to play a potentially large role in the transport of troops and equipment of the planned southern brigade of the African Standby Force. The weakening exchange rate has also pushed up the total cost of the controversial multibillion rand arms deal from a projected cost of R44,8bn this fiscal year to R47,48bn next year.

For the first time the treasury has given a detailed breakdown of the cost of the weapons systems that make up the controversial multibillion rand arms deal. According to data provided in the treasury's estimates of national expenditure, the cost of SA's four frigates will total R9,65bn. Three submarines cost R8,1bn, 30 Agusta utility helicopters R2,39bn, the 26 Gripen fighters R20bn, and the 24 Hawk fighter trainers R7,2bn.

Business Day