State Capture Inquiry: Spotlight falls on Free State R1 billion housing project

0:00
play article
Subscribers can listen to this article
Deputy Chief Justice Raymond Zondo
Deputy Chief Justice Raymond Zondo
SABC
  • The state capture inquiry has shifted its focus to a R1 billion housing project in the Free State.  
  • Nthimotse Mokhesi, head of the department of human settlements in the Free State gave evidence before the commission on Monday.  
  • The commission heard the department did not follow lawful procurement processes.  

The State Capture Inquiry has heard how a R1 billion housing project in the Free State province was "completely irregular".  

The province spent millions of rands on housing between 2010 and 2011 to little or no value.  

On Monday, Free State human settlements head Nthimotse Mokhesi, gave evidence before the commission.

Mokhesi came onto the scene later and brought an application on behalf of the department for its decision to be reviewed in relation to a prepayments scheme to suppliers. 

In 2013, the Free State department of human settlement brought an application before the High Court in Bloemfontein to review and set aside 106 building contracts.  

In court documents, Mokhesi had previously said his department made payments to contractors and suppliers without any written agreement or proof that houses had been built or partially built. 

On Monday, Mokhesi told the state capture inquiry that he believed his department's prepayment scheme was fraudulent.

But he also added that: "Perhaps I must also be very careful because not everything that looks like fraud is fraud."

He said the sole purpose of his affidavit, which he submitted to the court was to try and persuade the court to give them a favourable judgment in order to recover the money.

READ | Free State spent R631m on houses that were never built

Mokhesi said his department had made an advance payment of over R500 million before anything was done. 

And the ultimate loss for the department was estimated in the region of over R400 million.

The commission also heard that contracts were unlawful because the department did not follow any lawful procurement processes.  

The total allocation for the housing project in the Free State for 2010 – 2011 was R1.42 billion and the plan was to build over 21 000 low cost housing units, but that was not achieved. 

Evidence leader advocate Paul Pretorius said: "The whole housing arrangement in the province... From the very beginning, from the appointment to the contractors, right through to the prepayment to suppliers at the end of the financial year was completely irregular. With the result that the housing scheme in the department was to put it at the lowest to total failure."

Earlier, advocate Pretorius laid the foundation for this week’s evidence on the case. 

In his opening address Pretorius told commission chairperson deputy chief justice Raymond Zondo, there had been a number of reports and investigations into the housing matter, adding the commission’s legal team did not wish to rehash the whole investigation. 

"What we would like to do is focus on the issue of accountability and why certain people were not held accountable," Pretorius said.

Pretorius also said there would be evidence about a scheme that was devised which turned out to be fraudulent. 

ALSO READ |  Charges laid against Ace Magashule over R150m Free State housing project

"What is clear from the start is that neither contractors nor suppliers of materials to contractors were subject to any competitive bidding process which as we’ve dealt with in the asbestos matter, it is clearly unlawful and inexcusable," Pretorius said.

After Pretorius' opening statement, Mokhesi took the stand and told the commission that he did not know who selected the contracts for the housing project. 

But Pretorius told Zondo that a disqualified contractor was "indeed appointed" and according to a report, the contractor "performed miserably".

Pretorius also told the commission that each contract and arrangement should be investigated.

He said there were some allegations of links between illegitimately appointed contractors and officials. 

"And of course, whilst all of that was happening a number of relatively junior employees get disciplined and dismissed and those who should be held accountable aren't," Pretorius said. 

He gave the commission some background to the issue, saying during the 2010 and 2011 financial year, a new tender process commenced. 

He also said the evidence will show that by the time the bid adjudication committee came to consider the bids, the period of validity of the tender had expired.  And instead of extending the validity of the period of the tender it was abandoned. 

Pretorius also said those who qualified in terms of the bids and those who were disqualified, including those who were declared incompetent to build, were all put on the database and certain officials, including then MEC Mosebenzi Zwane merely selected who they wanted to do the work. 

The hearing will continue on Tuesday. 

We live in a world where facts and fiction get blurred
In times of uncertainty you need journalism you can trust. For only R75 per month, you have access to a world of in-depth analyses, investigative journalism, top opinions and a range of features. Journalism strengthens democracy. Invest in the future today.
Subscribe to News24
Lockdown For
DAYS
HRS
MINS
Voting Booth
Who do you think is going to win the 2020 US election?
Please select an option Oops! Something went wrong, please try again later.
Results
Biden is going to take it
46% - 5874 votes
It's four more years for Trump
54% - 6926 votes
Vote
ZAR/USD
16.40
(+0.24)
ZAR/GBP
21.41
(-0.46)
ZAR/EUR
19.45
(+0.06)
ZAR/AUD
11.63
(-0.22)
ZAR/JPY
0.16
(-0.29)
Gold
1918.47
(+0.43)
Silver
25.00
(+1.10)
Platinum
879.00
(+0.92)
Brent Crude
43.05
(+1.28)
Palladium
2398.00
(+0.36)
All Share
55307.88
(+0.07)
Top 40
50858.34
(+0.01)
Financial 15
10067.50
(+1.12)
Industrial 25
75172.99
(-0.52)
Resource 10
53946.31
(+0.29)
All JSE data delayed by at least 15 minutes morningstar logo