News / South Africa / State Capture

Makhosandile Zulu
3 minute read
20 Aug 2019
5:01 pm

Vrede Dairy Farm project can be turned around, Zondo hears

Makhosandile Zulu

The witness says with strategic partners, the project can still be revitalised so the intended beneficiaries could gain.

File image: Dairy cows on the Vrede dairy farm in the Free State. Picture: Neil McCartney

The former Free State Department of Agriculture head, Peter Thabethe, on Tuesday told the Commission of Inquiry into State Capture that he is of the view that the failed Vrede Dairy Farm project can still be turned around and made commercially viable.

The commission was looking at photographs taken in April of the incomplete milk processing plant on the farm.

The commission heard that construction of the plant was never completed, because at the beginning of its second year it was put on hold due to a number of investigations.

Thabethe told the commission it had been expected that the construction of the plant and its commissioning would be complete by the third year.

Gupta-linked Estina Pty Ltd was meant to build the plant, the commission heard.

Gcabashe suggested the department did not closely monitor construction specifications of the plant, which Thabethe disputed, saying a design had been agreed upon.

Thabethe said he still believes that the project can be turned around for implementation and that with regards to the plant, a financial assessment would need to be done to determine whether it is worth it to continue with its construction.

He added that he is of the view that not a lot of funds would be required to complete construction of the plant, because a lot of work had already been done.

Thabethe said a number of individuals in the private sector have inquired about the project and the farm, indicating that they would be willing to purchase it from the government.

Selling the farm is one option that Thabethe said he had considered, as well as revitalising the project so the intended beneficiaries would gain from it, or seeking a strategic partner to work with the beneficiaries.

The commission also heard testimony that when Estina’s contract was terminated because the national department of agriculture had instructed that funding towards the project should be halted, the Free State Development Corporation (FDC) was appointed on 14 August, 2014 to manage the assets on the farm.

Previous testimony revealed that the department Thabethe headed paid the FDC almost R1 million monthly to manage these assets.

The commission also heard that the FDC was appointed without going through a competitive bidding process to land the contract.

Thabethe said state law advisors had been approached for advice on appointing the FDC, and they had also assisted in drafting an agreement between the department and the corporation.

Gcabashe took issue with this, saying Thabethe “can’t pass the buck all the time” and as the former head of the department he should take responsibility for some of the decisions he took.

The commission also heard that the department Thabethe headed did not closely monitor the farm, relying on monthly and quarterly reports from Estina, which Gcabashe and the chair of the inquiry, Deputy Chief Justice Raymond Zondo, said could not be relied on in terms of accuracy.

Thabethe said he “infrequently” visited the farm to monitor progress there personally, but officials from his department did visit the farm more often.

As evidence that the department did not closely monitor the farm, Gcabashe noted that previous testimony had revealed that cattle and cattle feed would be stolen from the farm and milk was possibly illegitimately sold.

However, Thabethe disputed that the department did not monitor the project, saying “we knew what was happening on the ground”.

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