Free State spent R631m on houses that were never built

Hlaudi Motsoeneng (City Press)
Hlaudi Motsoeneng (City Press)

Bloemfontein - About 106 building contractors are being sued along with controversial ex-SABC boss Hlaudi Motsoeneng and Nozuko Mbalula, Sports Minister Fikile Mbalula's wife, over a housing scandal in the Free State involving hundreds of millions of rands.

According to court documents in the possession of Netwerk24, the Free State department of human settlements spent about R631m on housing between 2010 and 2011, with no houses to show for it. 

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Department head Ntimotse Mokhesi provided details of the transactions in a sworn affidavit submitted to the High Court in Bloemfontein.  

According to Mokhesi, the department made payments to the contractors and suppliers without any written agreements or any proof that houses had been built or partially built.

"The department hadn't followed prescribed procedures to indicate who the suppliers were and who had been paid. The total amount paid was about R1bn," he said.

"The payments were made illegally because there were no contracts with suppliers and proper procedures weren't followed. In addition, neither the national housing department nor the Treasury had approved it – or even knew about it. To top it all, none of the suppliers and contractors had lifted a finger or provided any materials," Mokhesi's statement reads.  

The Free State human settlements department is suing the contractors, Motsoeneng and Mbalula over the illegal payments. Motsoeneng and Mbalula were reported to have allegedly received millions from the transactions as trustees of two trusts.  

According to the statement, Mosebenzi Zwane, who was housing MEC at the time, Mpho Mokoena, who headed the department of human settlements, and other senior officials were also involved in the matter.

The money was spent after then Human Settlements Minister Tokyo Sexwale had threatened to transfer some of the Free State's housing budget to other provinces. The Free State and three other provinces had under spent the money allocated to them.

By October 2010, the Free State had spent just 10% of the R1.3bn allocated to it by Treasury to build RDP houses.  

Mokhesi said in the statement that the plan had been to spend the rest of the money as quickly as possible so that the province didn't forfeit it. 

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