1. (i) Sufficient budget allocation is available in the Special Defence Account to meet the contractual obligations related to Project HOTEL.
(ii) The department has however conducted a reprioritisation exercise to allocate the remaining SDA budget and to ensure that sufficient funding will be available to meet the contractual obligations on Project BIRO.
(iii) The Special Defence Account has been reduced by approximately R9 billion from 2018 after the Project BIRO contractual commitments were already finalised.
2. Funding is not transferred to Armscor for prime mission equipment acquisition. Armscor as the procurement agency for the department manages the procurement and contracting process on behalf of the department. The payment is then released directly to the supplier from the DOD account via the Reserve Bank. The payments are made after Armscor, as the contract manager, has confirmed the achievement of the specific milestone on the contract.