Vrede dairy project subject to confidential agreement

Roy Jankielsohn MPL

DA Free State Spokesperson on Agriculture

The Portfolio Committee on Agriculture and Rural Development in the Free State Legislature yesterday heard from the Head of the Department, Mr M.P. Thabete, that an agreement between the province and the private sector partners Estina/Paras in the contraversial Vrede Dairy Project is subject to a confidentiality clause that outraged members of the committee from across political parties.

In terms of the agreement the Indian company “Estina” and their South African partner “Paras” will receive a 49% share with a R228 million investment in the R570 million project, while the 100 local beneficiaries will jointly receive 51% of the shares through a government investment of R342million. This implies that Estina/Paras will obtain a 49% share with an investment of only 40% of the projected cost of the project. Government will thus be investing R114 million more in the project than their private sector partners without the beneficiaries receiving the proportionate number of shares.

Attempts to conceal the contents of the agreement with a confidentiality clause only adds to the controversy around this project that already has public allegations of Gupta family involvement. The committee must be commended for making it quite clear that the agreement may not be deemed confidential.

The project plans to milk 500 cows and produce 40 000 litres of milk per day that will be processed by a factory built by Estina/Paras. The Department invested R30 million in the project last year on designs, an Environmental Impact Assessment, planting of fodder, etc. This year an amount of R84 million is to be invested in the infrastructure, machinery and cattle. The Department indicated that 400 pregnant cattle had already been purchased for the project. The rest of the money will be invested in the following financial years.

While the DA in the Free State supports the empowerment of local beneficiaries and the creation of viable employment opportunities, the secrecy around the agreement between Estina/Paras and the Provincial Government and the unequal allocation of shares is a serious cause for concern. The DA will request the Public Protector in the Free State to investigate these issues in an attempt to ensure transparency and equity in this project.