The Zondo commission is hearing testimony from DA member of the Free State legislature Roy Jankielsohn regarding alleged fraud and corruption in the Vrede Dairy Farm project. Picture: Getrude Makhafola / ANA. The Zondo commission is hearing testimony from DA member of the Free State legislature Roy Jankielsohn regarding alleged fraud and corruption in the Vrede Dairy Farm project. Picture: Getrude Makhafola / ANA.
Johannesburg - The Free State government spent R2.3 million to buy two tractors for the botched Vrede Dairy farm project, ignoring donated tractors by national government which idled at the Vrede town's show grounds, the state capture commission of inquiry heard on Monday.
The commission, chaired by Deputy Chief Justice Raymond Zondo, delved into the Vrede diary farm project that saw more R200 million meant for emerging black farmers allegedly looted by officials and the fugitive Gupta family.
Democratic Alliance member of the Free State legislature Roy Jankielsohn took the stand on Monday, detailing responses to his probing questions to the then Free State agriculture MEC Mamiki Qabathe after media reports on the alleged illegality of the project surfaced in 2013. Vrede is the hometown of Mosebenzi Zwane, who initiated the diary project in 2011 and was agriculture MEC before Qabathe.
Photos of the 4 400 hectare farm and its outbuildings were shown at the commission, with Jankielsohn identifying objects on the map.
He further detailed monies paid to Estina, the Gupta-linked company, for the project as stated by Qabathe, including R2.3 million that was used to buy two tractors.
Zondo interjected: "R2.3m for tractors? That sounds so unrealistic and excessive."
Jankielsohn added that national government donated tractors that were never used, and instead were sold by officials.
"During this time, chairperson, the national government donated tractors for the project. I am of the opinion they should have been used for this. The tractors stood at a show ground in Vrede and [officials] gave them to various entities and those entities sold them back to government," he said.
Furthermore, R1.2 million in public funds were used to buy offices for Estina in Vrede. Estina later sold the offices to a private individual for R1.3 million, said Jankielsohn.
There was no feasibility study prior to the implementation of the project, which had an overall cost of R570 million for the province.
Estina was meant to contribute R238 million to the project, but that never happened. Evidence leader, Advocate Leah Gcabashe said a document from the provincial government showed there was a feasibility study, but that that was the same as "putting the cart before the cow" as it was done in 2012, two years after the project started.
Beneficiaries of the project, whom Qabathe told Jankielsohn were black residents of Vrede and previously disadvantaged, were sidelined in the project and received nothing.
"The biggest crime is when politicians give people hope and then dash that hope. The Public Protector [Estina diary] report contributed to that. My concern was about beneficiaries. One of them, Mr Ngwenya was very vocal and was murdered. The amount of fear among beneficiaries is very well known, very few have spoken out...chairperson, no agricultural project can be done by government without benefiting people on the ground."
He testified about the fear that swept through the province and how Moses Tshake, who was investigating how the money was spent on the project, was kidnapped and murdered. Tshake headed audits for the agriculture department in the province and was killed in 2013. Jankielsohn said then premier Ace Magashule spoke at the funeral, telling mourners that the senior official was poisoned, but never told the police probing the killing.
"Officials are the ones who appear in court on various charges, not politicians... and we know politicians gave the instructions on this project. There is a culture of fear in the Free State, officials are appointed according to cadre policy. When you start speak out on any malfeasance and corruption, you could be sidelined."
The contract was terminated in 2014. A R103 million cancellation fee was paid to Estina as was stipulated in the contract, he said. However, the provincial government paid Estina even after the contract was cancelled, and Estina pocketed R136 million by 2016.
"Since the cancellation of contract August 2014, on 20 Dec 2014, R29.9 million was paid to Estina, R60m was paid on 8 May 2015 and on 25 May 2016 R26.2m was paid, all totalling R136m. This is interesting because there is a cancellation fee for Estina. It is known that the Gupta Leaks [leaked internal Gupta emails] showed R30 million from the project paid for the Gupta family wedding in Sun City in 2013. The cancellation agreement says otherwise and the payments say something else," Jankielsohn said.
He said the project has since been overtaken by the Free State Development Corporation (FDC), but that Estina continues to receive R20 million a year even today. The FDC appointed a company that builds roads and schools in the province to manage the project at a monthly fee of R1 million. The botched project has never yielded any milking of cows or processing of milk for the benefit of people of Vrede and the province, said Jankielsohn.
"The FDC's job is to stimulate economic growth in the Free State, fund SMMEs and manage assets to be able to fund small businesses. I don't think diary farming is part of the FDC mandate," he said.