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DA allegations on aerospace village baseless – Davies

The Centurion Aerospace Village

The Centurion Aerospace Village

18th September 2015

By: African News Agency

  

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The trade and industry department has dismissed as baseless allegations by the Democratic Alliance that more than R90-million was spent on the Centurion Aerospace Village (CAV) and that there was no commercial activity or any of the promised 1 000 jobs.

“The Department of Trade and Industry is fully committed towards the development of the CAV into a leading supplier park in the aerospace and defence, manufacturing and services sector,” said Rob Davies, the minister of trade industry in a statement on Thursday night.

“It is important that in exercising their important constitutional oversight functions, opposition parties avoid the temptation to behave recklessly with freely available facts,” said Davies.

“As the executive and accounting authorities we are also required to respect the legal and constitutional rights of individuals that may be cited in audit investigations, as was the case in this instance.”

In the statement, the department said the DA made “baseless allegations” at a press conference earlier on Thursday relating to the use of public funds, the absence of buildings at the CAV and “inaccurate allegations” regarding the processes involving an investigation instituted by the department.

On Thursday, DA MP MP Patrick Atkinson said more than R90-million was spent on the CAV, launched in 2008.

Atkinson said he first became aware of the CAV after a parliamentary visit in January to Aerosud, a privately owned aircraft components manufacturer, were Members of Parliament were told about the adjacent CAV that the DTI had promised to create.

He was addressing the media outside the CAV perimeter fence south of Pretoria. He said he submitted a parliamentary question to Davies and asked for the annual breakdown of the costs of establishing the CAV since its inception and the figure totalled R95-million.

“I submitted a further parliamentary question asking the minister who the first so-called tenant was that allegedly moved in to the village in January 2012. He responded by saying Aerosud. A senior executive at Aerosud denied such a claim,” he said.

Atkinson said he gathered that Aerosud has owned the land adjacent to the CAV for the past 15 years and does not form part of the village.

He said the minister’s parliamentary reply revealed the existence of a DTI mandated forensic report, following an investigation by private company Nexus into the financial and administrative irregularities at the CAV.

Atkinson said the DTI said that the CAV was operational and that there was one tenant.

The company is a global supplier of aircraft components and was awarded a tender to supply Airbus in an open international tender, requiring globally competitive capabilities.

“The CAV is fully operational … The CAV is well placed to attract further tenants in the aerospace and defence manufacturing and related services sector. Supplier parks and clusters of this nature have a long start-up phase where the provision of infrastructure is critical to their success,” the DTI said in a statement.

“It is for this reason that the continued installation of the bulk earthworks infrastructure will continue and pave the way for the entry of more tenants and the development of a successful supplier park.”

The department said R94 million was transferred to the CAV and R67-million was spent on bulk infrastructure and the construction of buildings.

DTI said that it became aware of possible irregularities at the CAV project in August 2012 and it immediately instituted an internal audit.

Thereafter an independent forensic audit was commissioned in July 2013. The final forensic audit reports were presented to the DTI in August 2014.

“Disciplinary action was initiated against staff including action involving the immediate dismissal of a director responsible for the programme. The dismissal was pre-empted by the resignation of the staff member concerned,” the department said.

“Nevertheless the DTI is pursuing criminal charges against the individual concerned and with the intention of recovering funds as recommended in the audit. The legal services section of the DTI currently awaits a pre-trial conference date for these proceedings.”

Disciplinary action was also taken against one chief director and was still under way. The department said in both cases the staff members were accused of negligence in the performance of their duties.

A criminal case was opened at the Sunnyside police station in December 2013 against two people, including a former DTI employee as well as a company.

The department said in terms of oversight and governance, the development and implementation of a more robust finance, governance and oversight system and appropriate institutional arrangements at the CAV was concluded and put in place.

“In keeping with the above, measures to strengthen the Board of Directors, the appointment of a Chief Executive Officer and the appointment of a fully functional Audit and Risk Committee at the CAV have been implemented,” the department said.

“In certain other instances contracts with service providers were rescinded. In the case of one company efforts to recover funds were fruitless, because the company has been liquidated.”

South Africa has globally competitive capabilities in the aerospace sector and the CAV was one instrument, among others, designed to support private sector companies to raise their competitiveness and capabilities, including with respect to their export readiness and entry into global value chains in the sector, the department said.

Atkinson on Thursday said that the “most egregious” findings in the Nexus report included alleged reckless tender appointments.

The report recommends that fraud and corruption charges be instituted against those responsible.

He said the report found a reasonable suspicion of fraud and corruption with regard to expenditure on catering to the value of R1 142 177.02.

Edited by African News Agency

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