The high cost of the Airbus move

So, did we honestly save R30 billion by cancelling the A400M contract? Not really, argues Helmoed Romer Heitman.

The decision to pull out of the Airbus A400M project has been hailed, but what now? There seems to have been very little - if any - thought given to the impact of this decision on South Africa's capability to meet its regional responsibilities. Nor to the likely cost. We may yet find that "saving" R30 billion by cancelling the contract is going to cost rather more than that when the dust has settled.

The implications and costs will be strategic, economic and political.

The key strategic issue is if South Africa accepts its regional security responsibilities, it will mean expanded involvement in peacekeeping, crisis response, stabilisation and relief operations in Africa.

One critical requirement is airlift. Eight A400Ms would have given the SA Air Force at least minimum long-range and heavy-lift capability.

They would have also given it time in which to consider how best to replace the 46-year-old Hercules.

So, what now? Does South Africa continue chartering old ex-Soviet Air Force transports until one of them falls out of the sky, which they do with depressing regularity? Or do we buy other transport aircraft to give us the required capability. If so, which aircraft?

Some believe that the current Hercules, the C-130J, is the answer. It is an extremely capable aircraft, but it cannot, by itself, meet the requirement. Simply buying the same basic payload capacity would require 15 C-130Js for about R19bn, depending on logistical and technical support.

That would seem to have saved us R11bn. But the C-130J can't transport the large vehicles and heavier equipment required for future missions.

The C-130J is not a practical means of deploying an Oryx helicopter. The gearbox must be taken off, and that means a second aircraft to fly in the gantry needed for re-assembly, and 24 hours of work before the Oryx flies, instead of four.

So, we are back to chartering old ex-Soviet Air Force transports and putting our people at risk. Or not being able to fly in the right equipment and putting them at risk that way. Or begging the Americans to fly our equipment for us.

Bear in mind, too, that 15 C-130Js will cost more to fly and maintain than eight A400Ms. Operating costs could easily be a third higher, which is likely to eat up the R11bn saving - or more - over the life of the aircraft.

We could buy C-17s. Four of them would give us the same basic payload at a cost of about R12bn. But a minimum viable fleet would probably be six for about R18bn. Plus at least four or preferably six C-130Js, to fly into airfields that are too small for the C-17. Alternatively, four C-17s and 10 C-130Js.

Right away we are at R23bn or more. And the higher operating cost of the mixed fleet of 10, 12 or more aircraft will eat up the "savings".

The eight A400Ms were also going to perform long-range search and rescue and in-flight refuelling roles. More money - perhaps as much as R5bn (to buy four C-130Js and modify them) - will have to be spent to meet those requirements. Then perhaps a fleet of at least two A330 MRTT tankers at R4.8bn.

By now we are well past the R30bn mark, before we have taken the higher operating costs into account.

Of course, we could just buy eight C-130Js for R10bn or so and pretend we can meet our obligations. The price for that will probably be paid in bodies.

But the impact of this decision will not just be strategic.

The reality now is: who will enter into a development partnership with SA in the future?

The decision also casts doubt on the sincerity of President Jacob Zuma's recent statements that our defence force would be properly equipped to support peace operations throughout Africa.

Either we move quickly to find an equally capable alternative to the A400Ms - so, no saving - or we realise that this saving will cost us very dearly in terms of industrial development and investment, of international and regional standing, and in our ability to influence events around us.

Source: Tribune