SECRETARY of Defence Sam Makhudu Gulube is in the US on a two-week trip to finalise the purchase of a mega-bling VIP jet for president Jacob Zuma.
The jet will cost taxpayers $235 million (nearly R2 billion) if the purchase goes ahead.
The 300-seater Boeing 777-200LR earmarked as “ZA1” will cost $80m to reconfigure to Zuma’s specifications on top of a $150m purchase price, The Star has learnt.
Also included in the deal is a $28m Global Express 600 for the deputy president’s use, bringing the total bill for the VVIP transport to $183m (more than R2.2bn).
The Star has information that the deal, though negotiated on the basis of cabinet approval, has failed to follow normal requirements that such procurements be put out to competitive tender.
“It’s simply wrong to spend nearly R2 billion on President Jacob Zuma’s new Boeing 777-200 LR business jet when so many people in our country are poor,” DA defence spokesman David Maynier said.
“I hope delegates at the ANC’s national policy conference ask President Zuma to explain how a R2 billion presidential business jet will help our country tackle the triple challenge of unemployment, poverty and inequality.”
Negotiated directly with Boeing, according to evidence in The Star’s possession, the Zuma jet was secured at a price, before reconfiguration, of $155m – knocked down from $305m.
Originally destined for another buyer, the 777 apparently became available when that deal fell through.
But after the South African shoppers – with ministerial policy adviser and political commentator Professor Sipho Seepe serving as a go-between – missed an earlier deadline for a “definitive agreement” to be signed and sealed by May 30, the temperature went up.
New deadlines were set for the middle of June, with Boeing negotiators J Miguel Santos and Carlos Horan threatening to pull the plug if the South Africans did not make concrete commitments.
Seepe confirmed to The Star he had acted as a middleman between the ministry and Boeing in pursuit of cabinet directives in respect of the aircraft.
It remains unclear whether the Treasury was approached to invoke special powers to override the competitive tender specification on the basis of urgency.
Also unclear is what budgets would be called upon to stump up on a shortfall of $183m identified by former defence minister Lindiwe Sisulu.
This was after Sisulu indicated last month that the Department of Defence (DoD) could find the $80m required to reconfigure and refurbish the earmarked Zuma plane.
She was also of the opinion that the DoD could cover the hefty operational costs for the two planes if it reprioritised budgets and expenditures.
The Treasury, however, has remained tight-lipped on whether authorisation was given to the rerouting of government funds as suggested by the Defence Ministry.
Another deviation from normal practice mooted in the Defence Ministry’s apparent haste to push the contracts through was to acquire the planes via SAA – as opposed to the SA Air Force, the relevant authority mandated for VVIP air travel.
Such a procedure would be possible, The Star has learnt, under Treasury regulations – which allow for other organs of state to be used for procurement purposes.
However, such procedures do not obviate the overriding requirement for going to a competitive tender process.
Finance Ministry spokesman Jabulani Sikhakhane said: “National Treasury was consulted, as is normal with matters of this nature.”
However, the Treasury was not in a position to disclose its specific recommendations, he said.
The government’s planned spending spree comes at a time when earlier blunders and misadventures around VIP air transport could cost the country billions in months and years to come.
Nigerian-owned Adonai Aviation – awarded a five-year lease contract to the value of R826m in 2010, which was subsequently summarily cancelled – continues to be in litigation with the DoD, demanding a review of the cancellation of its contract. If successful, the review would open the door to multibillion-rand damages claims.
Meanwhile, the current presidential jet, Inkwazi, was returned to service at the beginning of this year after being out of service for most of last year for routine upgrades and maintenance.
DoD spokesman Siphiwe Dlamini said there was a new minister (Nosiviwe Mapisa-Nqakula) at the helm, who was still being briefed:
“These briefings are to allow the minister to familiarise herself with issues that need to be attended by her department. Once these are concluded, we will be able to engage,” Dlamini said.