Zuma’s bling Boeing to cost R2bn

The Secretary of Defence, Dr 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 the taxpayer $235 million (nearly R2 billion) if it 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, Independent Newspapers has learned. Also included in the deal is a $28m Global Express 600 for the deputy president’s use, bringing the total bill for the VVIP transports to $183m (over R2.2bn).

Though negotiated on the basis of cabinet approval, Independent Newspapers has information that the deal has failed to follow normal requirements that such procurements be put out to competitive tender. “It’s simply wrong to spend nearly R2bn on President 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 R2bn presidential business jet will help our country tackle the triple challenge of unemployment, poverty and inequality?”

Negotiated directly with Boeing, according to evidence in Independent Newspapers’ 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 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 he had acted as a “middleman” between the ministry and Boeing on cabinet directives in respect of the aircraft. It remains unclear whether or not 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 on to plug a shortfall of $183m identified by former defence minister Lindiwe Sisulu. This was after Sisulu, in May, indicated that the Department of Defence could find the $80m required to reconfigure and refurbish the earmarked Zuma plane.

She was also of the opinion that the Department of Defence could cover the hefty operational costs for the two planes if it reprioritised budgets and expenditures. One solution Sisulu proposed at the time was that refunds received from European manufacturer Airbus after the summary cancellation of its orders for the Airbus A400 M be returned from the fiscus to the Department of Defence to fund the VVIP transports. The Treasury, however, has remained tight-lipped on whether or not 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 South African Air Force, the authority mandated for VVIP air travel.

Such a procedure would be possible, Independent Newspapers has learned, under Treasury regulations – which allow for other organs of state to be used for procurement. However, such procedures do not obviate the overriding requirement for a competitive tender process. Approached for comment, Finance Ministry spokesman Jabulani Sikhakhane confirmed: “National Treasury was consulted, as is normal with matters of this nature.”

However, Treasury was not in a position to disclose its specific recommendations, Sikhakhane said. The government’s planned spending spree comes at a time when earlier blunders and misadventures around VIP air transports 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 Department of Defence, demanding a review of the cancellation of its contract. If successful, the review would open the door to multibillion-rand damages claims.

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. The Boeing 777 is the world’s largest twin-engined aircraft, and has the longest range of any aircraft in commercial use. Department of Defence spokes-man Siphiwe Dlamini said there was a new minister 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. The briefings started a week ago and had to be postponed as she had to attend the ruling party’s policy conference, which ends Friday (today).”