South Africa


R631m vanishes in Free State housing scam — with no arrests a decade later

R631m vanishes in Free State housing scam — with no arrests a decade later
Mineral Resources Minister Mosebenzi Zwane addresses the media during the release of the 2016 health and safety statistics in the mining sector on January 19, 2017 in Randfontein. (Photo by Gallo Images / Sowetan / Veli Nhlapo)

Some foundations were laid for RDP houses. Building materials, when delivered, were dumped on site. Contractors simply failed to build houses, vanished with government funds and faced little to no consequence.

In February 2011, then human settlements minister Tokyo Sexwale allegedly told Mosebenzi Zwane to stop illegal payments for a Free State housing scheme.

Mpho Mokoena testified he heard as much when he attended the meeting in Sexwale’s office. Mokoena, former Free State human settlements department head, testified at the Zondo Commission on Tuesday 22 September 2020.

A day earlier, former president Jacob Zuma was due to testify. His lawyers told the secretariat Zuma was preparing for his criminal trial, he had received medical advice to mitigate his risk of contracting Covid-19, and he was taking legal advice about regulation changes.

R631-million for naught

With Zuma’s appearance struck from the week’s plan, the legal team introduced evidence on an obscenely wasteful Free State housing project. According to the present Head of Department (HOD) Nthimotse Mokhesi, the department spent a staggering R631-million on the project without receiving anything in exchange.

“There was no evidence when the department made its payments that it received value for the payments it made in that houses had been built or partly built,” read Mokhesi’s statement. At most, some foundations were laid for RDP houses. Building materials, when delivered, were dumped on site. Contractors simply failed to build houses, vanished with government funds, and faced little to no consequence.

Mokhesi testified the department did not get bang for its buck, while the scheme’s consequences included homelessness for some of those meant to benefit, and a delay in housing for hundreds of families. His predecessor, Mokoena, claimed Zwane masterminded the con in October 2010.

Mosebenzi ‘Mastermind’ Zwane

Zwane now serves as an ANC MP and is dogged about his political survival. Zuma appointed him as Minister of Mineral Resources in 2015. Previously, he was the MEC of Human Settlements in the Free State.

Free State head of the Department of Human Settlements Nthimotse Mokhesi testifies at the Zondo Commission in Johannesburg on 21 September. (Photo: Gallo Images / Papi Morake)

To date, witnesses at the inquiry have detailed Zwane’s role in the Vrede Dairy Project. As minister, he was instrumental in securing Tegeta’s acquisition of Optimum Coal Mine. Now Zwane stands accused of masterminding a wasteful housing project with hundreds of millions of rands unaccounted for.

Zwane allegedly hatched a plan in October 2010 to ensure the provincial department would not forfeit more than R1-billion allocated by the national department for the 2010-2011 financial year.

“Our problem is that we were not spending on our human settlement grant,” explained Mokoena.

He claimed Zwane proposed a solution: belatedly approve a housing project before the financial year ended and hurriedly pay contractors in advance, long before they met building milestones. “For me, it was illegal,” said Mokoena.

The former HOD was adamant he was the only person at the October 2010 meeting who raised a problem with Zwane’s plan. “We were trying to work from the allocation backwards,” he explained.

Eat the dust

After the October 2010 meeting with officials, Mokoena asked Zwane for a word in private.

“He said then to me: look, we have discussed about this. This is my plan and it’s going to happen,” testified Mokoena.

Zwane allegedly told Mokoena if he did not sign approval for the plan’s implementation he should resign. Mokoena claimed Zwane threatened him with “abject poverty”, saying to Mokoena he would be “poor, you’ll be like grey, like dust”.

Chairperson Deputy Chief Justice Raymond Zondo asked Mokoena to translate precisely what Zwane allegedly said to him in Sesotho. Mokoena answered, “You’ll be walking next to your shoes, you won’t walk in your shoes. There will be no shoes to walk in, in other words.”

According to Mokoena, Zwane presented a list of contractors the following week. Fewer than half the companies were known to Mokoena, who had worked in the department for 15 years. According to Mokhesi, contractors who had never built a single RDP house were given money to build 600 of them.

Not on my watch, says Sexwale

Once Mokoena approved implementation in late 2010, a payment glut began. The payments caused minister Sexwale alarm. The national department was stunned at the department’s payments, including handing cash to suppliers. In February 2011, Zwane and provincial officials (including Mokoena) met Sexwale in his office.

During the meeting, said Mokoena, Zwane addressed the legality of the plan he allegedly hatched in October 2010. Mokoena recalled:

“The minister said, ‘No, I’ll not agree to it. I hear you but this is not correct.’ ”

“Did the MEC attempt to persuade the national minister that the plan was legitimate?” asked Pretorius.

“He did try in the meeting, but he did not succeed,” said Mokoena.

He wrote in his affidavit to the inquiry:

“The minister said he heard that we were paying in advance and that same must be stopped as it is illegal, and it could not happen whilst he is the Minister of Human Settlements.”

Zondo grilled Mokoena on his own liability:

“Why is it that you had not been able to build even one house? Why was it that you had not appointed service providers on time? Because you were the HOD.”

Mokoena said he regretted many of his actions as HOD. Pretorius gave the witness a nod for his candour. In 2013-2014 the provincial department investigated the scheme and sanctioned some managers.

Consequences? What consequences!

The Special Investigating Unit (SIU) has interrogated the scheme’s finances, too. Seeming bewildered at the inaction, Zondo wanted to know why there were no arrests. He pressed Mokhesi as to why political “kingpins” in the swindle had not been brought to book.

Zondo said: “It is concerning because part of the complaints connected with allegations of State Capture is that some of the law enforcement agencies were paralysed or didn’t do their job in regard to certain matters.”

Pretorius noted: “It just seems in the first place unfair to charge those who were down the line in the pecking order, as it were, in executing the plan and not charge the person that devised the plan.”

Zondo added: “It is concerning when the taxpayers have lost as much money as we are talking about here and they lost it in 2010 and 2011 by the end of the financial year […] that’s March 2011.

“Ten years later there is nothing that the public knows that the department knows that gives confidence that something is being done, that the matter is being given the urgent attention it deserves.”

Mokoena is due to continue his evidence on Wednesday 23 September 2020 from 10am. DM


Comments - Please in order to comment.

  • Bryan Macpherson says:

    “It is concerning because part of the complaints connected with allegations of State Capture is that some of the law enforcement agencies were paralysed or didn’t do their job in regard to certain matters.” This is still the concern – ten years later and the rot within the enforcement agencies still exists.

  • Ian McGill says:

    Where are the September arrests as promised by the NPA?

  • Hermann Funk says:

    The President should set a deadline for Advocate Batohi. Either there will be arrests bey October 10, 2020 or you are fired.

  • M D Fraser says:

    I listened to Stephen Grootes interviewing the current Free State premier on SAfm this morning. Never before have I been more underwhelmed. Not even all his patronising and fawning could cover for her obvious ineptitude.

  • Sergio CPT says:

    Hear, hear Ian! A loota continua! Staggering that zero has been done to date – so symptomatic of the recent and current anc, and yet one still has learned columnists contributing to DM, who are apologists for the anc. SA has sunk so low under this thieving cabal.

Please peer review 3 community comments before your comment can be posted


This article is free to read.

Sign up for free or sign in to continue reading.

Unlike our competitors, we don’t force you to pay to read the news but we do need your email address to make your experience better.

Nearly there! Create a password to finish signing up with us:

Please enter your password or get a sign in link if you’ve forgotten

Open Sesame! Thanks for signing up.

We would like our readers to start paying for Daily Maverick...

…but we are not going to force you to. Over 10 million users come to us each month for the news. We have not put it behind a paywall because the truth should not be a luxury.

Instead we ask our readers who can afford to contribute, even a small amount each month, to do so.

If you appreciate it and want to see us keep going then please consider contributing whatever you can.

Support Daily Maverick→
Payment options

Become a Maverick Insider

This could have been a paywall

On another site this would have been a paywall. Maverick Insider keeps our content free for all.

Become an Insider
Elections24 Newsletter Banner

On May 29 2024, South Africans will make their mark in another way.

Get your exclusive, in-depth Election 2024 newsletter curated by Ferial Haffajee delivered straight to your inbox.