Mon séjour en Afrique du Sud (Cape Town)

Government is pleased to announce that it has accepted an invitation from Airbus Military for South Africa to participate in the A400M multi-role mission transport aircraft design and manufacture programme. In return, the government has committed to procure and take delivery of between eight and 14 aircraft as the programme matures between 2010-2014. The cost of eight aircraft would be euros 837m.

Negotiations are currently under way between the government and Airbus Military to determine the terms of agreement for the country's participation.

At the same time, Denel and Aerosud have engaged Airbus Military to develop the details of industrial partnership contracts around specific dedicated work-share packages that will become effective as soon as an agreement has been signed between Government and Airbus Military.

We are confident that a Memorandum of Agreement will be signed in the coming weeks.

Further announcements will be made as soon as more information becomes available.

1. Since at least 2000, the SA government, through the departments of trade and industry, public enterprises and defence have been developing a strategy for the long-term development and sustainability of South Africa's high technology aerospace sector.

2. Government's Integrated Manufacturing Strategy (through the dti) and the Advanced Manufacturing Technology Strategy (through the Department of Science and Technology) both emphasize the importance of building globally competitive capabilities in knowledge-intensive industries, of which aerospace is a prime example, if we are to grow our economic and industrial development away from resource-based industries. We have already had marked successes beyond all initial estimates in the automotive industry in this regard.

3. South Africa boasts strong engineering capabilities in the aerospace sector which provide a solid foundation for future development. However, shifts in the global environment towards mergers and acquisitions and increased pressure on profitability of country-specific programmes have encouraged governments and the industry to contemplate multinational, long-term investments in specific, high volume contracts. The A400M Programme is the only global aviation programme of its kind, offering launch countries unequalled opportunities to participate in ways that sustain and enhance their own industrial and technological base.

4. Of critical importance to government is the fact that the A400M programme provides the country with the opportunity to meet its growing international obligations, particularly in regard to peacekeeping and support, disaster relief and management, and a range of other civil, commercial and military missions.

5. The SANDF's [South African National Defence Force] current military transport and airlift capability is carried by a small fleet of nine Hercules C130 aircraft. They are reaching the end of their working life, and will need to be replaced by about 2010.

6. More important, experience has shown, and projections indicate, that the cargo carrying ability of the C130 and its various upgrades are insufficient to modern and future needs.

Already over the last three years, South Africa has had to spend over 100m rand to contract in privately owned airlift capabilities so that the SANDF could deploy personnel, resources and material into certain African peacekeeping operations.

7. The current proposal contains specific benefits for South Africa:

Firstly, guaranteed work-packages to industry, designed to meet global standards, will be in place for the next 17 years.

Being in at the beginning also gives our industry a strong chance to bid successfully for maintenance and upgrade work in the future. This will allow South African companies to be integrated into what could be the world's largest aviation supply chain.

Secondly, the partnership allows South African industry and the defence force to influence the design and industrialisation of the aircraft that will ensure, amongst other things, that the aircraft we are committed to purchase already incorporate many of the features we consider necessary for deployment according to our own needs.

Thirdly, the cost benefit to the country as a whole is greater than following a simple procurement process in 2010 as the country's investment is linked directly to the number of aircraft to which we commit, but the return on that investment will derive from the success of the whole programme. Furthermore, the payments are stretched over the whole period of the programme, thus ensuring that costs are more easily managed on a year-by-year basis, rather than on large commitments over a short period of time.