State Capture Inquiry: ’Zwane, Magashule dictated who was paid first in R1bn Free State housing project’, Newsline

Johannesburg – Former Free State MEC Mosebenzi Zwane and former Free State premier Ace Magashule have been accused of pushing for advanced payments to contractors who were illegally hired to build houses as part of a multi-million spending-spree linked to an R1 billion Free State housing project.

The former head of the department of human settlements in the Free State, Mpho Mokoena, wrapped up his evidence at the Zondo commission on Wednesday.

The commission is this week investigating corruption linked to an R1bn housing project in the Free State. The inquiry has heard evidence from two witnesses who sketched how Zwane had engineered the idea of ensuring that more than R500 million, allocated for the building of houses, was spent within a few months.

Mokoena and his successor at the department testified that in 2010 the Free State department of housing had a budget allocation of R1.4bn for building 14 000 RDP houses. By October 2010, only 10% of the budget was spent and no houses were built.

The national government has the mandate to withdraw funds not spent by provincial governments and reallocate the funds to other provinces which were spending their budgets. The national department of human settlements had threatened to withdraw the Free State government’s housing budget in 2010 due to understanding.

Mokoena said Zwane devised a scheme which saw 106 contractors, handpicked by the former MEC, being appointed outside of procurement processes to build houses. Zwane had also instructed that suppliers be paid by the department to ensure that building material was delivered to contractors in time.

This scheme was illegal and Mokoena testified he had warned Zwane about the illegality of the plan. He said he ultimately signed an internal memorandum which gave the project the go-ahead because he was threatened by Zwane.

More than R500m was paid 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 that Magashule had requested payments to Els be prioritised.

Evidence presented at the inquiry also showed the provincial cabinet, which included Magashule, was warned by national treasury against making prepayments to contractors and suppliers.

Mokoena said the provincial government did little to act on these warnings.

The former HOD insisted the scheme was Zwane’s idea. Mokena left the department in December 2011.