Zondo hears of Zwane’s ‘favoured’ contractors and Ace’s promises of ‘honey and milk’

The chairperson of the commission of inquiry into state capture, Deputy Chief Justice Raymond Zondo, has heard how former Free State MEC for Human Settlements Mosebenzi Zwane had three contractors that were “close” to him and were favoured for housing contracts in the province.

He also heard testimony of former premier Ace Magashule’s going around the province promising “honey and milk” while the department’s budget suffered, through his notorious “Operation Hlasela”.

Zondo on Tuesday heard testimony from the former head of the department of human settlements in the Free State, Mpho Mokoena, on the R1-billion housing project.

Mokoena told Zondo of how Zwane had given him a list of 106 contractors which would be awarded the contracts for constructing houses for the project, a list he said included three companies which were close to the former MEC.

The list of 106 contractors Zwane gave Mokoena included contractors who were unknown to the department, who were allocated a large number of RDP houses to construct, which was not common practice, Zondo heard.

Zondo heard how Zwane allegedly told Mokoena that if he, the latter, was opposed to the former MEC’s “illegal” intervention plan he should submit his resignation.

Mokoena resigned from the department in December 2011 due to pressure that stemmed from then premier Ace Magashule’s “sporadic” public announcements of RDP houses being allocated to more beneficiaries despite there being budget and capacity constraints, which the former premier had been told about, Zondo heard.

“We were under a strict schedule of ensuring that we turn the material we had into houses,” Mokoena said, adding that Magashule was also applying pressure for bigger houses to be built.

Zondo heard that by October 2010, the provincial department of human settlements was underspending by less than 10% of the budget its national counterpart and Treasury had allocated for the R1-billion housing construction project.

No houses, however, had been built by October 2010, Zondo heard.

Mokoena said the delayed implementation of the project prompted the national department of human settlements to give a notice to its Free State counterpart that it would withdraw a particular amount of the budget for the project to redirect it to other provinces that were “performing”.

Mokoena told Zondo that Zwane then called a special meeting in October 2010 in which he provided a solution “to our problem of nonspending”.

The meeting was attended by a number of people, including Zwane’s advisor at the time, Zondo heard.

Mokoena said Zwane would not reveal where he had sourced the “expert advice” which informed the “illegal” intervention plan he proposed as a solution.

Mokoena said he was “uncomfortable” with the “legality” of Zwane’s plan, which involved the department’s payment for services before they were rendered, a matter which he expressed to the former MEC who responded by saying it was not a concern and that it was also being done in other provinces.

Zondo heard that Zwane then tasked his advisor at the time to conduct research on the legality of the plan and to come up with an internal memorandum which would guide the implementation of his plan.

Mokoena said after the meeting, he held a private meeting with Zwane, during which he again expressed his discomfort with the plan and the former MEC’s response was that he, Mokoena, should resign if he did not want to implement the plan.

On 25 November 2010, Zwane’s advisor presented the document he had been tasked with creating, which Mokoena refused to authorise by way of signature, Zondo heard.

Mokoena said his refusal to authorise the document resulted in a meeting with Zwane, who again asked for his resignation letter because he, Mokoena, did not want to implement the former MEC’s plan.

That meeting concluded with Mokoena eventually signing the document, Zondo heard.

“Because I had to resign if I did not sign the document,” Mokoena said.

He later conceded, however, that since Zwane could not dismiss him for refusing to authorise an illegal plan he should have refused to do so.

A week later, Zwane approached Mokoena with the list of the contractors that would be awarded the contracts to build the houses.

Zondo heard that Zwane had, in some instances, intervened to expediate the department’s payment to the three contractors that were allegedly close to him.

Some of these contractors had been allocated about 500 units to build at R55,000 per RDP unit, Zondo heard.

By December 2010, Zwane’s plan had seen R500 million being paid from the project, however, no houses had been built at the time.

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