Paras Dairy’s ‘non-existent contract’ was never under suspicion, Zondo hears

The Commission of Inquiry into Allegations of State Capture, chaired by Deputy Chief Justice Raymond Zondo, on Thursday heard how Indian-based company Paras Dairy was not contracted to the Department of Agriculture in the Free State to work on the Vrede farm dairy project.

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Former minister of mineral resources Mosebenzi Zwane testifying at the commission in relation to his trip to India in October 2012, where his travel itinerary required for him to meet with Paras’s CEO.

Zwane stands accused of initiating the failed Vrede farming project, which involved Gupta-linked company Estina.

During the proceedings on Thursday, evidence leader Pule Seleka had revealed that Paras denied its involvement in the Vrede farming project.

Paras ‘contract’

Addressing the matter, Zwane, who was MEC of agriculture at the time, told the commission that he was under the impression that the department had a contract agreement with Paras.

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“Chair, maybe let me say before we get to that point. It is a fact that my HOD [Head of the Department, Peter Thabethe], together with Ashok Narayan went to India and this is a fact in terms of the report we got. That necessitated me when I was going to India… to go and verify what was in the report.

“So for the longest time I was under the impression that Paras in the one that’s doing work in Vrede. Until there were issues that were raised by the auditor-general in mid-2013 I had been operating under that impression,” he said.

When asked by Zondo on what action he took after finding out that there was no contract, the former minister indicated that he had already left the department in March 2013.

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“The report of the auditor-general was [released] after when I had left and there was subsequently a report by [National] Treasury which came at a later stage when I was no longer there,” he said.

Zwane said his trip to India was only for him to play an oversight role as the MEC at the Paras dairy farm, although the oversight did not happen.

“My impression was based on the fact that it was a common cause that there should be processes that are followed in identifying a service provider and those processes are being under taken by the HOD and other officials. Once the HOD had taken those processes we are ready to move.

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“We don’t get to a point where we are shown contracts or being told that contracts are ready… in the report normally what comes as we are going to work with Paras, which in case was when I told. That is why in October I wanted to go play my oversight when I was in India,” he said.

The former minister conceded that he never asked Thabethe about the agreement the department had with either Paras.

He went on to say that he did not have to check if there was a contract because there was nothing suspicious, adding that the there were many project contracts at the department he did not see.

Estina

Zondo pointed out that Estina was the company that actually had a contract with the department instead of Paras, to which Zwane said he did not know about Estina being involved.

Zwane reiterated again that he was long gone when he found out Estina was working on the project.

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Estina was identified in early 2012 as the company that would partner with the Free State government in a dairy project.

At the time, the plan was for Estina and the Department of Agriculture to inject R500 million into the project.

The department then kick-started the project with R30 million to Estina, but money continued to flow into Estina’s coffers, it was previously reported. The contract was cancelled in August 2014.