Last Thursday, an innocuous-looking entry appeared at the top of Armscor’s tender announcements list. In it, Armscor announced a Request for Information for an ‘Inter-Contintental VIP aircraft’, without providing any further information other than contact details for the Armscor staff handling the tender and a due date of 20 November 2015.
Early yesterday morning, that detail arrived in the form of a fascinating article by Erika Gibson of Netwerk24, who acquired details of the tender’s requirements. Those requirements include a condition that the aircraft to be acquired must be capable of carrying 30 passengers in a VIP configuration over a distance of 13 800 km without stopping to refuel and with the usual safety reserves.
That requirement alone means that only a handful of aircraft, such as the Boeing 747, 777 and 787 and the Airbus A330, A350 and A340, have the size and range to meet it. It also means an absolute minimum cost of R3.2 billion for the aircraft alone, as the cheapest aircraft on that list cost over $220 million in their base configurations (see Boeing price list and Airbus price list). Fitting a VIP interior will add approximately another $100 million, or R1.4 billion. A conservative estimate is that the new aircraft will cost at least R4 billion altogether
This is an unnecessary requirement, given that there’s no reason why a South African president needs an aircraft of that size and range. There is a small increase in cost and security concerns from the refueling stops needed for the current presidential transport (a 737 BBJ) when travelling to far-off destinations, but they are more than offset by the fact that it’s much cheaper to operate a 737-class aircraft than anything larger. Especially when a new 737 BBJ costs less than R2 billion with many second-hand examples going for significantly less. So if there was a genuine need for a new aircraft to replace the Falcon 900 usually used by the Deputy President it could have been fulfilled much more cheaply. The insistence on an aircraft that can travel 13,800 km non-stop with that many passengers is based on personal desire, not operational need.
The argument that has been frequently made on Twitter over the weekend — that this aircraft is intended for the Presidency and not for President Zuma himself — misses the point entirely. Not only because President Zuma will have the exclusive use of this aircraft until his term ends in 2019, but because the decision to sign off on this acquisition will ultimately have been made by the President and he therefore should be held accountable for the choice. It’s instructive to note that it’s precisely to avoid this perception of personal gain that on the rare occasions that U.S. presidents acquire replacement aircraft for Air Force One they intentionally time it so that the new aircraft will arrive during the next president’s term.
To acquire such an aircraft now shows both gross irresponsibility as well as a remarkable level of tone-deafness amongst the country’s leadership. South Africa is in a fiscal crisis, needing desperately to reign in spending as a result of downgrades, spiralling debt and a contingency reserve that has been completely used up by the last public sector wage increase. There simply isn’t enough money to pay for this aircraft without cutting into an existing department’s funding – problematic, as the government has already committed to doing exactly that in order to locate the R3 billion needed to prevent a university fee increase in 2016.
Of course, what this most likely means is that, as in the case of previous VIP aircraft acquisitions, the billions for this new jet will be paid for entirely out of the defence budget, itself already under strain. Indeed, if rumours within the South African Air Force (SAAF) are to be believed, money earmarked for new maritime patrol aircraft and UAVs has already been redirected towards a VIP aircraft acquisition.
To understand how this works, it’s important to know that new purchases for the South African National Defence Force (SANDF) are not paid for out of the regular government budget, but out of the portion of the annual defence budget allocated to the Special Defence Account. It is standard practice around the world for defence forces to spend a certain proportion, usually around 30% of their budget, on new acquisitions in order to ensure that equipment does not become obsolete and to allow for reliable multi-year funding. In the SANDF, because of the too-high personnel costs as a result of the budget being too small for the number of troops, less than 20% of the budget is allocated annually to the Special Defence Account, through which the Arms Deal was also funded. What this means is that if this jet is funded through the defence budget, which is just 5% of total government spending, it will have zero impact on other government spending but all defence acquisitions like maritime patrol aircraft that were allocated funding via the Special Defence Account will be either cancelled or delayed. Alternatively, the jet could be funded from the SANDF’s operations and training budget, which is already too low to support the current force and its commitments.
The consequences of this will be dire for the SANDF, as it’ll result in even deeper cuts to training and operational funds just as the SANDF has committed to the African Standby Force (ASF) and African Capacity for Immediate Response to Crisis (ACIRC). This means that desperately needed acquisitions like maritime patrol aircraft, offshore patrol ships and new logistical trucks will be delayed once again.
At a time when many of the SAAF’s senior fast-jet pilots are either resigning or electing not to renew their contracts because of poor pay and insufficient flying hours, while a lack of funding has meant that some aircraft like the C-130BZs are being grounded rather than being sent for major servicing in order to cut costs, it is madness for the President to be placing a VIP jet acquisition above the urgent operational needs of the force over which he is commander in chief.
To place this into perspective, R4 billion from the defence budget could buy a mix of long-range and medium-range aircraft that could cover the country’s entire exclusive economic zone and its search and rescue area of responsibility. Or it could be enough to acquire 3 offshore patrol vessels similar to the Royal Netherlands Navy’s new Holland-class ships. It could even have gone into the acquisition of long-range tanker transports, like the A330MRTT, which would both be able to hugely extend the operational ranges of the SAAF’s Gripens and Hawks while having modular VIP interiors that could be used when necessary. Placed into training and operational funds, it could go a long way to allowing the SANDF to begin implementing the Defence Review’s recommendations.
Instead, it will go towards ensuring that the president does not need to experience the inconvenience of a refueling stop when travelling to far-off countries. We at ADR do not believe that this represents either a necessary purchase or value for money.