Judge Mathebe Phatshoane is hearing evidence in the case against Northern Cape ANC heavyweights John Block, Alvin Botes, Yolanda Botha and Trifecta director Christo Scholtz.
They face charges of fraud, corruption and money laundering.
The National Prosecuting Authority alleges the Trifecta Group entered into a number of lease agreements with the Northern Cape social development department in which rentals, or rental space, were grossly inflated.
All the accused pleaded not guilty on all the counts.
The State’s first witness, Trevor White, a PWC forensic auditor, told the court the State faced a potential loss of R24 million over ten years in only one lease agreement in Upington.
This included more than R4.6 million the State lost due to office space “that did not exist”.
The court heard the taxpayer also coughed up more than R1.3 million to Trifecta, which owned the Oranje Hotel building, before officials could occupy the office space.
White testified that before the Trifecta lease on the Oranje Hotel building was signed, officials had already identified another building, the Bosch Diesel Electric building, which was deemed suitable for office space.
The provincial social development department at the time in 2005 was looking for office space in Upington for the newly established SA Social Security Agency (Sassa).
The lease would be singed by the department and then be ceded to Sassa.
White testified that rental for the Bosch building would be around R70,000 a month for a five year contract.
Renovations to the Bosch building, to accommodate Sassa, would have cost about R450,000 and were for the expense of the landlord (Bosch).
Although a final agreement was drawn up by officials for the Bosch building, it never became official or signed by December 2005.
However, in February 2006 the then provincial head of social development Yolanda Botha allegedly informed officials about an offer by a Northern Cape businessman Sarel Breda, the owner of the Oranje Hotel building.
“Suddenly a new player appears on the scene … no tender proses,” submitted White.
The court heard Breda’s Oranje Hotel was about twice the size of the Bosch building and would cost an estimated R145,000 a month.
White testified Botha signed the lease for the Oranje Hotel even before the agreement was approved by the provincial tender board.
Further negotiations apparently followed on the Oranje Hotel lease in regard to renovations to accommodate Sassa.
Trifecta told the department the renovations would cost R3.8 million.
White testified the landlord wanted the State to pay for these renovations.
The case continues.