AS IT HAPPENED | The legislature 'failed' the people of the Free State with Estina dairy project, #StateCaptureInquiry hears

2019-07-22 15:30

The judicial commission of inquiry into state capture is hearing testimony related to the collapsed Gupta-linked Estina dairy farm project in Vrede, in the Free State.


(Courtesy of SABC)

Raymond Zondo chairs the state capture inquiry

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Last Updated at 12:39
22 Jul 17:07
The commission is adjourned until 10am Tuesday morning.

22 Jul 17:05

The opinion indicated that there were other options to be explored, where land can be made available to the department.

If Estina is supposed to receive any dividends from the proceeds of a processed plant on municipal land - between public and private partnerships - there will be a complicated process for public/private partnerships to be established.

22 Jul 16:51

22 Jul 16:49
Venter became aware that the request for the deviation had been approved.

22 Jul 16:47
The HOD approved the appointment of Estina on a deviation, it was not clear on what the reasons for the deviation were.

22 Jul 16:44

22 Jul 16:36

22 Jul 16:25

22 Jul 16:24
There were certain concerns raised by the provincial accountant general about the validity of the agreement.

22 Jul 16:19
Funds from other projects were reprioritised. The initial amount was R30m but needed another R84m to get to an annual cost, "if my memory serves me correct," Venter says.

22 Jul 16:12

A milking parlour had to be constructed in which milk would be produced in high volumes. Emerging farmers would be trained here to become milking farmers.

Estina was to construct the processing plant and a company would be established where Estina and beneficiaries would have shares.

22 Jul 15:54

Venter is currently explaining the structure of the departments within provincial government, and his responsibilities within his own section. 

Venter says the premier has advisors, but they can do no more than provide advice - they are not responsible for implementation of any strategy within government.

22 Jul 15:42

Venter starts his testimony by providing some insight into his background.

22 Jul 15:39

Ace Magashule's legal counsel has put himself on record at the commission.

22 Jul 15:37

The next witness, Albertus Venter, is now sworn in. Venter is giving testimony in his capacity as Deputy Director: Corporate Administration and Coordination in the Free State Premier's Office.

22 Jul 15:26

Jankielsohn is excused. 

Zondo adjourns proceedings for five minutes, to prepare for the next witness. 

22 Jul 15:24

Advocate Gcabashe wraps up Jankielsohn's evidence and allows him to say a few words before leaving. Jankielsohn thanks Zondo and the commission for the work they are doing, which is very important he says, particularly in the case of the Vrede dairy farm, where the people of the Free State have suffered. 

Zondo, in turn, thanks Jankielsohn for his "very important" evidence and testimony, as a member of the provincial legislature, in this particular matter. 

22 Jul 15:16

22 Jul 15:15

The evidence is brought back to the graphics of the dairy farm in Vrede, which have now been properly labelled, helping Jankielsohn take Zondo through the layout of the farm.

22 Jul 15:06

Jankielsohn says if the Treasury report into Estina is anything to go by, then the premier, Qabathe and other senior officials were aware of the issues at Estina and deliberately failed to act.

Jankielsohn says the biggest losers in this entire project are the intended beneficiaries, who, contractually, were 51% shareholders, even though they received no benefit. 

Zondo points out that if Indian dairy company Paras was never involved in the Vrede dairy farm project, then Estina, an IT company, was effectively running the dairy farm. Gcabashe tells Zondo there exists a memorandum of understanding between Paras and Estina, but Jankielsohn has not seen the document.

22 Jul 14:46

Jankielsohn tells Zondo the whole Vrede dairy farm project represents a classic example of how the provincial legislature has failed the people of the Free State. Members of the legislature are controlled by "political bosses", says Jankielsohn.

22 Jul 14:36

Jankielsohn says that 'senior people' in government knew about what was happening at the dairy farm project in Vrede. In spite of this, they continued to fund the project and still continue to do so.

Jankielsohn says the government does not want to acknowledge or admit that the Estina dairy project had failed, and that is why they continue to keep it going (at a cost of R20m annually), with the cattle that remain.

22 Jul 14:29

Jankielsohn says he was able to establish that the agreement between Estina and the Free State government was drafted in the Office of the Premier. Jankielsohn says the premier knew about the contract and was meant to ensure oversight. 

Jankielsohn tells Zondo that the next witness, Albertus Venter, is the legal advisor in the Office of the Premier who would have more knowledge of the contract drafted with Estina.

22 Jul 14:23

22 Jul 14:19

Back from the lunch adjournment, Advocate Gcabashe continues leading Jankielsohn's evidence, and seeks further information on the "culture of fear" within the Free State government he had earlier described.

Gcabashe refers to an article in the media bundle of evidence, referring to Moses Tshake, and asks Jankielsohn if this was one of the investigations he referred to, which remain incomplete. 

Jankielsohn: "That is correct."

22 Jul 13:07

Zondo calls for the lunch adjournment. Back at 14:00.

22 Jul 13:06

22 Jul 13:04

22 Jul 13:00

22 Jul 12:59

22 Jul 12:50

Jankielsohn says they were not happy with the manner in which the Public Protector dealt with their complaints. Jankielsohn says the Public Protector also failed to deal with the issue of the beneficiaries. 

The investigation should have been extended to "look into the politicians", says Jankielsohn. 

22 Jul 12:33

22 Jul 12:28

Jankielsohn says the cancellation clause in the contract between the Free State government and Estina stated that the project would only be cancelled if the government ran out of funds, which never happened. Estina was due to contribute its share of funding in the next phase of the contract, but the project was cancelled shortly before this could happen. 

Jankielsohn says the Free State government is still paying over R20m annually for the project, which has been taken over by the Free State Development Corporation. 

Jankielsohn notes that on a recent site visit, they found that the project still was not self-sufficient, and Jankielsohn estimates that R1m a month is being paid to milk about 100-160 cows, which he says is "excessive".

22 Jul 12:18

Jankielsohn says R136m in total was paid to Estina, but the cancellation agreement states that R106m was paid. Jankielsohn notes that the R30m discrepancy is more or less, according to the "Gupta Leaks", what was apparently spent on the controversial Gupta wedding at Sun City.

22 Jul 12:11

22 Jul 12:05

Jankielsohn continues reading: "...the training mentoring and support will be assessed beforehand by Glen agricultural institute, and if it is not satisfactory, it will have to be rectified by the service provider."

Jankielsohn says this reference to the beneficiaries is important, because "up until now, to date, these beneficiaries have been totally sidelined for the project, and it is my opinion, chairperson, that an agricultural project cannot exist without beneficiaries. It is not government's job to milk cows. In this specific project, the purpose would have been to identify beneficiaries first, and then to implement the project and ensure that these beneficiaries are part of the project from the outset."

Jankielsohn: "Because then they would have been able to take ownership of the project. There would have been in-house training of the project, and they would've been given employment during the initial phases of this project as well. The exclusion of the beneficiaries is very strange to me, given that government projects have one purpose, and that should be to benefit some beneficiaries on the ground, the people on the ground." 

Jankielsohn: "And in this case, the community of Vrede, most of the people there are impoverished, there's huge unemployment, and people were hoping that this project will bring some relief to at least those 80 people who were later identified to beneficiaries, and unfortunately, those people are still sidelined in this project."

22 Jul 11:52

The MEC, in response to Jankielsohn's questions, said the Vrede dairy farm project would be complete by July 2015. The project was initiated in July 2012.

22 Jul 11:48

Back from the break, Advocate Gcabashe continues leading Jankielsohn's evidence. Jankielsohn is going through the list of responses to the questions he put to the MEC in the Free State legislature, regarding the Vrede dairy farm project.

22 Jul 11:37

22 Jul 11:23

Zondo calls for the tea adjournment. Back in 15 minutes.

22 Jul 11:23

22 Jul 11:18

Jankielsohn now reads through a list of questions put to MEC Motlagomang Qabathe, who took over the dairy farm project from Zwane, in the legislature. Qabathe's legal team is also present at the commission.

22 Jul 11:12

Jankielsohn says a report from Agriculture MEC Mosebenzi Zwane led to supplementary questions from his side, particularly around the funding of the project.

22 Jul 11:03

Jankielsohn explains the concept of "Mohuma Mobung", which was an agriculture strategy by the Free State government, a strategy which was meant to be used in the dairy farm project. Jankielsohn says the "Mohuma Mobung" concept was introduced to him by Mosebenzi Zwane. 

Jankielsohn now references an M&G article about the Vrede dairy farm project, published in 2013, headlined "The Guptas' land of milk and money", where a number of concerns about irregularities in the project were outlined.

22 Jul 10:53

22 Jul 10:47

Gcabashe guides Jankielsohn through the visuals of the farm. Zondo pauses Jankielsohn's testimony to ask for much more clarity on what exactly is being pointed out by the arrows in the visuals.

Arrow 1 points to the (R2.6m) gate, Arrow 2 points to the structure labelled as the (R30m) "Milk Processing Plant", and Arrow 3 points to a structure meant to be used as a "Workshop & storage shed for equipment", where no monetary value has been specified.

22 Jul 10:35

Jankielsohn tells Gcabashe that as a member of the Free State legislature, he was involved in "trying to get to the bottom" of what happened with the Estina dairy farm project. 

Jankielsohn says his interest in the project was triggered mostly by articles in the media, as well as a SOPA address where former Free State premier Ace Magashule mentioned the project. Jankielsohn says he has visited the farm on a number of occasions, as part of his oversight duties. 

22 Jul 10:28

Advocate Gcabashe takes Jankielsohn through his affidavit, and confirms that the affidavit before him, as well as the supplementary affidavit, are indeed his and that his signature appears on both. These will be the basis of Jankielsohn's testimony today.

22 Jul 10:24

The first witness, Roy Jankielsohn, is now sworn in. Jankielsohn is a member of the Free State Legislature, and also DA caucus leader. 

22 Jul 10:12

Deputy Chief Justice Raymond Zondo gets proceedings under way. First up, legal counsel for implicated parties, including Mosebenzi Zwane, have stood up and introduced themselves ahead of witness testimony.

Today's evidence leader, Advocate Leah Gcabashe, now addresses Zondo on some procedural matters.

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