LIVE FEED: State Capture Inquiry – September 23, 2020
Johannesburg – The Zondo commission will on Wednesday morning hear further testimony regarding corruption allegations related to a R1 billion Free State housing project.
Two witnesses who are employed by the Free State department of human settlements will take the stand.
On Tuesday, the inquiry heard evidence from the former head of the department of human settlements in Free State, Mpho Mokoena.
On Monday, the commission heard from a former government official that the project saw the department pay over R600 million to contractors and suppliers for the building of 14 000 houses. The houses were never built and the processes used to appoint contractors and suppliers was marred by irregularities.
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Provincial governments are given budgets to spend on building houses for citizens every year. In 2010 the Free State department of human settlements had a budget of R1.3bn, but by October 2010, just four months before the end of the financial year, the department had spent just less than 10% of the budget on housing.
Mokoena explained that the national Human Settlements Department had decided to take away the allocated budget from the province because it was not spent. The money would then be distributed to other provinces that were spending their budgets.
Mokoena testified that facing this threat, Zwane called a "war room" meeting where he introduced a plan which would ensure that the housing budget was spent.
Mokoena recalled that Zwane explained that the department would buy building material from suppliers to ensure that it would be delivered to contractors so their work, to build houses, was not hampered.
Mokoena said he raised questions on the possible illegality of this scheme with Zwane, but the former MEC insisted that this was legal and was being done in other provinces. The October 2010 meeting concluded that a document would be drafted on the project.
Mokoena said when he again raised concerns with Zwane, he was simply told if he would not agree to the implementation of the project, he could resign.
He told the inquiry that in November 2010 he signed the document approving the housing project because he was under pressure to save his job.
"So I realised he was still putting me in the same corner, so I signed it because I had to resign if I did not sign the document," Mokoena said.
Mokoena said a week after the document was signed, Zwane brought him a list of 106 contractors that the former MEC insisted should be appointed on the project.
The list was filled with unknown individuals who had never done business with the provincial government, Mokoena said.
Following these appointments, within a matter of three months R500m was paid out to suppliers for building material meant for contractors to supply the 14 000 housing units.
Evidence presented at the commission shows that no houses were built and the Free State government later approached the Bloemfontein High Court for an application seeking to recoup the funds paid to suppliers.
Mokoena summarised the motives behind the accelerated spending as Zwane's strategy of ensuring the housing budget was spent before the national Human Settlements Department could withdraw the funds due to underspending.