News / South Africa / State Capture

Makhosandile Zulu
3 minute read
4 Oct 2019
4:56 pm

Zondo questions rush in implementing Vrede dairy project

Makhosandile Zulu

The state capture inquiry chair says the Free State department of agriculture should have completed a feasibility study before implementing the project.

High tech milking equipment during a site visit by the leader of the DA, Mmusi Maimane to the Vrede Dairy farm that was run by Gupta company Estina, 12 July 2017. It was intended to benefit the communiy but has been alleged to be a front for money laundering and also alleged to have been the source of funds for the Gupta wedding. Picture: Neil McCartney

The chairperson of the commission of inquiry into state capture, Deputy Chief Justice Raymond Zondo, on Friday questioned the former head of the Free State department of agriculture, Peter Thabethe, about why there had been a rush to implement the Vrede dairy farm project when a feasibility study had not been completed.

The commission was looking at the R30 million the department had paid Estina in July 2012 when the company had a balance of just over R16, which Zondo said suggests it was not the type of entity the department should have partnered with.

The R30 million was meant to be spent on Estina’s obligations in the first phase of the project.

Evidence leader at the commission, Advocate Leah Gcabashe, said R29 million of that R30 million was reserved by Estina for the construction of a parlour for the farm.

She asked Thabethe if Estina had justified this, to which he said the department “engaged” the company and an agreement was reached.

Gcabashe, however, questioned how Estina could justify reserving the money for the construction of a parlour when a feasibility study had not been completed.

In response to Zondo’s concerns about rushing to implement the project, Thabethe said there had been no rush and that he was convinced it would have been implemented without any problems.

Zondo further asked Thabethe why the department could not complete all the necessary “paperwork” first before starting the project.

Thabethe answered he could not delay the implementation because it was part of the deliverables outlined in his contract.

However, Zondo noted that the contract did not entitle Thabethe to do things the wrong way – the correct way being to complete the feasibility study first before implementing the project.

“That’s correct, chair,” Thabethe responded.

Gcabashe commented that Thabethe’s contract couldn’t have been the reason for the rush because the provincial Executive Council (Exco) had approved the project in June 2012 and knew that Thabethe had hoped he could budget R140 million per annum for each of the three years of the project, and that he had to source an additional R84 million.

“[Exco was] aware of [these] constraints,” Gcabashe said, asking Thabethe why then did he feel that his contract compelled him to hastily get the project under way.

Thabethe said the department had been assured by Estina that the deliverables of the first phase would be done at no extra cost to the department.

Zondo said in the absence of “special reasons”, there was no reason why the department could not wait until the study was completed before the project was implemented.

Thabethe responded by saying a preliminary feasibility study had been completed which gave the greenlight for the project to go ahead, and that a detailed feasibility study was the only thing outstanding.

Gcabashe noted that the preliminary feasibility study Thabethe relied on is a “very thin document” dated October 2012.

ALSO READ: Govt’s funding of Vrede Dairy Farm didn’t make sense, Zondo hears

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