State Capture Inquiry: Zondo shocked at R1bn Free State housing project corruption
Johannesburg – Deputy Chief Justice Raymond Zondo expressed shock at revelations of corruption about a R1 billion Free State housing project which saw contractors score over R500 million in prepayments while no houses were built.
The commission has this week focused its eyes on a R1 billion Free State housing development project which was supposed to produce 14 000 housing units for Free State residents, but not much was derived from the project.
Zondo spoke broadly about his concerns about evidence being presented at the corruption inquiry. He expressed shock and disappointment that public initiatives meant to benefit citizens fell prey to dubious corrupt dealings.
"The people who were supposed to be taken care of received no benefit while their money was paid to many people. It is most frustrating to hear what I hear in this commission and there seems to be no indication that it is slowing down. It seems like there are some people who are saying they will get their own share out of this corruption," Zondo said during Wednesday's hearings.
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 R1.4 billion, but by October 2010, just four months before the end of the financial year, the department had spent less than 10% of the budget on housing.
On Tuesday, the former HOD at the department of human settlements in the Free State, Mpho Mokoena, explained 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, former MEC Mosebenzi Zwane then called a "war room" meeting in October 2010 where he introduced a plan that would ensure that the housing budget was spent.
Mokoena recalled Zwane explained the department would purchase building material from suppliers to ensure it would be delivered to contractors so that 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 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 told if he did not agree with the implementation of the project then 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.
More than R500 million was paid out to suppliers and contractors in three months between 2010 and 2011. This was despite work not delivered.
The national government caught wind of the advanced payments in 2011 and the minister of human settlements Tokyo Sexwale warned Zwane and Mokoena that advanced payments should stop.
Mokoena said shortly after this warning, Zwane insisted these advanced payments should continue.
Zwane had also instructed Mokoena that a particular contractor, Rochelle Els, should be prioritised for advanced payments. Mokoena said Zwane told him Magashule had requested payments to Els be prioritised.
Another witness Mphikeleli Kaizer Maxatshwa, who served as subordinate to Mokoena, testified to the scheme's illegality on Wednesday.
Maxatshwa was part of a group low ranked employees who were fired in 2015 due to their involvement in the project.
Evidence presented to the commission shows no officials who served as accounting officers were ever disciplined for their involvement in the project.
Zwane is expected to appear before the commission on Friday.