Vrede dairy project costs are ‘unrealistic and excessive’, says Raymond Zondo

Deputy chief justice Raymond Zondo. Picture: ALON SKUY
Deputy chief justice Raymond Zondo. Picture: ALON SKUY

“Unrealistic and excessive” is how state capture commission chair deputy chief justice Raymond Zondo has labelled the exorbitant amounts spent by Free State government in the controversial Vrede dairy project.

On Monday, Free State DA leader and agriculture and rural development committee member Roy Jankielsohn, told the commission that a “cursory look” at the project figures “immediately raises alarm”.

At least R200m of taxpayers’ money meant for emerging black farmers in Vrede, Free State, allegedly flowed to a Gupta-linked company Estina, with some of the loot allegedly used to settle the bill for the Guptas’ lavish family wedding at Sun City in 2013.

Public protector Busisiwe Mkhwebane’s 2018 report on the Vrede dairy project vindicated former agriculture MEC Mosebenzi Zwane and former Free State premier Ace Magashule for their alleged role in the scandal.

Both are former president Jacob Zuma’s top lieutenants and stand accused of corruption and wide-ranging state capture allegations.

Unsatisfied with Mkhwebane’s findings, which were dismissed as a whitewash, the DA took the report on review. The Pretoria high court declared the report invalid and unconstitutional and set it aside in May 2019.

The public protector, whose fitness to hold office has been questioned following a series of embarrassing court setbacks, found that the Free State department of agriculture was guilty of maladministration for its handling of the project, that proper processes were not followed and that the tender agreement between Estina and the department was illegal.

She ordered Magashule, who is now ANC secretary-general, to institute disciplinary action against officials who presided over the project.

On Monday, Jankielsohn said the Vrede dairy project was first introduced by Magashule during his state of the province address several years back did not trigger anything at the time.

It was an article published by the Mail & Guardian in 2013, titled “The Guptas land of milk and money” that piqued his interest, he said.

“It was an interesting headline … it raised concerns that there might be irregularities concerning the project.”

He said he sent questions to Zwane and his response lifted the lid on the scandal that engulfed the project, which was to milk 500 cows per day to produce 40,000l of milk.

Zwane had responded that R342m over three years would be spent on the project — R114m per year — with the first contribution towards the project paid out in 2012.

Zwane’s department spent the cash as follows:

  • Purchasing of dairy cows: R6.2m
  • Dairy equipment: R37.7m
  • Cattle shed: R500,000
  • Security gate and guard house: R2.6m
  • Veterinary laboratory: R300,000
  • Cattle feed plant: R7.3m
  • Milking plant: R30m
  • Four tractors: R2.36m
  • Farm equipment including cultivators and spray guns: R3.5m
  • Implements including screw drivers, shovels, axes: R2.5m
  • Silage bunker: R5m
  • Gravel access road (approximately 2km): R1.2m
  • Labour costs: R1.3m
  • Land surveyor, accounting, professional, administration and legal fees: R12m

“This reply [from Zwane] is very important. Just a cursory look at this, it immediately raises alarm. I asked why is it necessary to purchase additional tractors because the national [agriculture] department donated R40m of tractors to the Free State,” Jankielsohn said. 

Zondo chipped in, saying the figures sounded “so unrealistic and excessive”.

Jankielsohn said they would have expected that, after spending all this money, the dairy farm would be functional, sustainable and self-supporting, which was not the case.

The contract between private company Estina and the provincial agriculture department was terminated on August 13 2014, and no claim was made by Estina since the cancellation of the contract.

Jankielsohn disclosed that Magashule had indicated during the course of the project that more than R1m of public funds was used to buy property for a Estina, which acted as the project’s implicating agent.

The property was later sold by Estina for some profit, he said.

mkentanel@businesslive.co.za

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