South African cabinet terminates A400M buy
Yesterday, the South African Cabinet decided to terminate the contract to purchase eight A400 Airbus strategic lift aircraft.
Armscor will be instructed to terminate the programme as soon as possible. The termination of the contract is due to extensive cost escalation and the supplier’s failure to deliver the aircraft within the stipulated timeframes. The cost escalation would have placed an unaffordable burden on the taxpayer at a time when the national fiscus is under pressure due to the economic downturn. An amount of R2.9 billion will be refunded to National Treasury as per the contract provisions.
This decision followed a review of the contract by the Ministries of Defence and Military Veterans, Finance, Trade and Industry, Science and Technology and Public Enterprises.