Thursday, Nov. 5, 2009

South Africa cancels Airbus contract

JOHANNESBURG (AP) - South Africa's government says it has canceled a contract to buy eight Airbus military aircraft that had set off a debate about public spending.

Government spokesman Themba Maseko told reporters Thursday that the decision was made because of delivery delays and "extensive cost escalation." Reports that costs had ballooned from 17 billion rand when the deal was signed five years ago to 47 billion rand (about $6 billion) had caused a political storm.

The governing African National Congress says the interests of South African tax payers would not have been best served by going ahead with the contract.

The opposition Democratic Alliance says it welcomed the cancellation, but wanted an investigation to determine what went wrong.

2009-11-05     16:29:12 GMT

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