Finance heads in JZ’s bad books for doing their job

Date: 19 Feb 2019

Former Treasury director-general testifies that Zuma wanted corners cut on major projects

THE opposition of former finance ministers Pravin Gordhan and Nhlanhla Nene to the cutting of corners and flouting of legislation by departments when procuring services was one of the main reasons why they were in former president Jacob Zuma’s bad books.

This is according to former Treasury director-general Lungisa Fuzile, who returned to the stand at the Zondo Commission of Inquiry into State Capture yesterday to continue his testimony.

Fuzile said Zuma and others in his government were frustrated by the Treasury’s reluctance to approve big transactions without due diligence, which they seemed to be personally committed to, without following due processes.

The projects included the nuclear procurement project; the purchase of shares in Engen by Petro SA; matters relating to SAA, including approvals; the Sassa (South African Social Security Agency) grant contract; the Gupta-linked Denel-Asia matter; and the closure of Gupta accounts by banks.

“These were big and significant projects. If you just take the nuclear procurement, I cannot think of any other project that the South African government had ever embarked on in the 25 years or so post-freedom.

“The conservative buy estimate could be about R1 trillion. They are big contracts and they involve a lot of money, so it stands to reason that when the people in Treasury and the ministers of finance were just doing their job and asking tough questions, people got frustrated. They wanted to see them to the end, and wanted commitments to be made,” Fuzile said.

He said while the country’s legal frameworks took the matter of procurement very seriously, it was evident that, at different points, there was a proclivity to try to cut corners.

He said the team insisted on securing a detailed assessment on the impact of the projects on the fiscus in terms of affordability, and the impact on the economy and its constituencies.

“The nuclear project had to be paid off through tariffs, and tariffs affect every household and business, so you cannot approach such a decision cavalierly. So we had to insist on thorough processes. But, of course, one could see that people had other interests,” Fuzile said.

He said there was no entity with a balance sheet large and strong enough to be able to support raising the amount of debt that was required, so the government would have had to inject money into any entity to implement the nuclear project.

He said Gordhan had warned Zuma specifically about the nuclear project after the former head of state organised a meeting with the Treasury and his advisors to insist that he wanted the controversial project, which would have blown the fiscus, to go ahead.

“Gordhan made the comments that if South Africa were to continue with the idea of nuclear, it would have to follow every rule in the book. He said failure to do so would turn the arms deal programme into a Sunday school picnic.”

    Nhlanhla Nene         Jacob Zuma

Former finance minister Des van Rooyen is set to cross-examine Fuzile tomorrow.

For more info see: http://www.iol.co.za/the-star