NEWS & ANALYSIS

Taxpayers still being milked for Vrede Dairy Project - DA FState

Roy Jankielsohn says company called Etsho being paid R32,5m over three years to implement 'turnaround strategy'

Vrede Dairy Project: The milking of taxpayers continue

During a question and answer session in the Free State legislature yesterday, the MEC for Economic Development, Tourism, Environmental Affairs and Small Business Development, Dr Benny Malakoane, indicated that a company called Etsho has been appointed by the Free State Development Corporation (FDC) to implement a “turnaround strategy” at a cost of R32.5 million over a three year period.

In addition, the Free State Department of Agriculture continues to invest R20 million annually into the project.

It is quite ludicrous that the Vrede Dairy Project is still being used to milk taxpayers in this manner even after an initial R184 million was invested by the Free State Provincial Government.

The original company involved in this project, Estina, and the benefactor of this massive R184 million investment, allegedly used R30 million of it to pay for the Gupta family wedding at Sun City.

The project was subsequently placed under the management of the FDC.

MEC Malakoane further indicated that the project generates a meagre income of R450 000 per month, while its monthly expenses are R1.5 million. In defiance of all logic and basic business principles, this project is kept alive at a huge expense to taxpayers.

At the same time, the 80 beneficiaries who jointly own 51% of the project continue to be completely side-lined. MEC Malakoane indicated that the beneficiaries will only be included in the project when it has reached “a sufficient state of maturity to do so”, which he also admitted is “unreasonable”.

Currently the only real beneficiary of the project is Etsho, whose expertise is not in dairy farming, but in project management, just as Estina’s manager had no dairy experience, but IT experience.

The confirmation of this information by MEC Malakoane in his replies further supports the DA’s claims that the project was never set up to milk cows, but rather taxpayers.

The DA requested the Public Protector to investigate this project, and the report on the completed investigation is long overdue. The DA will leave no stone unturned to ensure that those responsible for this blatant abuse of taxpayers’ money are held accountable.

Statement issued by Dr Roy Jankielsohn, Leader of the Official Opposition, 15 September 2017