Public Protector’s report into irregularities at Estina dairy farm project

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Estina dairy farm project, Free State

The Public Protector Advocate Busisiwe Mkhwebane released the report, which highlights irregularities, gross misconduct and maladministration by the Free State Agriculture Department in its handling of the Estina dairy farm project near Vrede.

The report highlighted the following procurement irregularities:

  • The HoD of the department did not follow the normal procurement process, as prescribed by the Constitution, Public Finance Management Act (PFMA) and National Treasury Regulations;
  • Payments to Estina were not in line with Treasury prescripts;
  • The agreement between the Free State’s provincial Department of Agriculture and Estina, the Gupta-linked company that executed the project, seemed to have been invalid;
  • The HoD did not follow normal procurement processes, as prescribed by the Constitution, the Public Finance Management Act (PFMA) and National Treasury procurement regulations.

The investigation followed several complaints lodged by Democratic Alliance Member of the Free State Provincial Legislature, Roy Jankielsohn, on 12 September 2013, 28 March 2014 and 10 May 2016.

Jankielsohn wanted the Public Protector to look into allegations that, in implementing the project, the department had failed to adhere to Treasury prescripts and to exercise financial control.

“The department could not provide documents, policies or measures to demonstrate that proper financial control and risk management of the project had been in place,” said the Public Protector.

The Public Protector said her concerns were further supported by the report of the Accountant General of the department.

She said due to the lack of cooperation with the department, her office could not determine whether the prices for goods and services procured in respect of construction, processing equipment, cattle and administration costs had been inflated.

In addition, Mkhwebane found that the department did not enter into a public-private partnership agreement, as alleged, for the implementation of the project in the context of Treasury regulation requirements.

The Public Protector said due to capacity and financial constraints, her office could not investigate the following matters:

  • The cause of the alleged deaths of cattle;
  • The complaint lodged in May 2016, as issues pertaining to the investigation had already been identified and the investigation was at an advanced stage;
  • The issue of value for money obtained by the government in terms of the agreement, which had already been investigation by the National Treasury’s Account General;
  • Recent newspaper articles on the emails relating to the Gupta family that surfaced around June 2017 (these were noted but did not form part of the scope of this
  • investigation);
  • How the money transferred to Estina was spent by the company (the Directorate for Priority Crime Investigation is dealing with the issue); and
  • The issue relating to beneficiaries who were intended to benefit from the project due to lack of information.