State capture: Zondo finds council's same-day approval of Estina dairy project 'strange'

13 August 2019 - 16:04
By Amil Umraw
Chief justice Raymond Zondo.
Image: Gallo Images / Sowetan / Thulani Mbele Chief justice Raymond Zondo.

The state capture inquiry heard on Tuesday how the Phumelela municipality in the Free State took a resolution to accept a proposal on the controversial Estina dairy farm project the same day it was punted by the province's agriculture department.

Testifying before the commission, former Phumelela municipal manager Moses Moremi described a presentation made by department officials at the municipality ahead of a council meeting on June 12 2012.

"A delegation by DoA [department of agriculture] led by Peter Thabethe [head of the department] visited the municipality. We had a planned council meeting that day. They requested to do a presentation to all the councillors. Local farmers were also in attendance," Moremi said.

In the presentation, the department sought to create awareness around the project and requested that a local farm be made available for production. It was punted as an opportunity for direct foreign investment and a method to create more than 500 jobs.

They needed the municipality to hand over Krynauwlust farm as the base on which the dairy farm would operate.

At the council meeting that followed on the same day, it was resolved that the project be approved and that Thabethe should draft resolutions that would be approved the following week.

Deputy chief justice Raymond Zondo, chair of the commission, expressed his concern at the haste in which the project was accepted, saying it was "strange" that the council approved the matter on the same day, without assessing the financial implications of handing over the farm.

The Vrede-based project, which was signed off in 2012, was promoted as a tool by provincial government to benefit small-scale Free State farmers, using their services to produce and sell milk and other dairy products on a large scale. However, of the R220m transferred out of state coffers to Estina - a Gupta-linked company contracted by the Free State's agricultural department to run the project - only 1% was spent on actual farming.

Most of the remaining money went to individuals and entities associated with the Guptas. Then Free State premier Ace Magashule, who now serves at the ANC's secretary general, and former Free State agriculture MEC Mosebenzi Zwane are among the alleged key facilitators who oversaw the deal.

The commission will continue on Wednesday.