MILKING IT
Gupta cash cow in line for another R65m
● After costing taxpayers R220m that allegedly went to the Gupta family, the failed Vrede dairy farm is set to soak up another R65m.
More than 500 cows have vanished from the Free State farm’s 980-strong herd, but a turnaround plan involves increasing the herd to 1,200 and ploughing millions into new buildings and infrastructure.
The plan has been slammed by local residents who were supposed to benefit from the farm, and by consultants, who said something was wrong with the way the farm was being run by the Free State Development Corp (FDC) and its subcontractor, E’tsho Holdings.
E’tsho has managed the farm since 2014, when the province’s contract with Estina, which helped to fund the R30m Gupta wedding at Sun City in 2013, was cancelled.
According to leaked e-mails, Atul Gupta directly scored R10m and the family allegedly bought a private jet and luxury cars with money from the project.
The 81 local beneficiaries were meant to get a 51% stake in the farm, with Estina’s 49% now transferred to the FDC.
E’tsho is being paid R1m a month to manage the farm, which is losing millions. The turnaround plan, tabled in March, said the farm had made R6.6m from milk sales since the 2015/2016 financial year, but between April and December last year operating costs were R18m.
Each cow’s daily milk yield was reported as 8.3l, about a quarter of what it should be, and the document said only 211 of the farm’s 359 cattle could be milked. Of the others, 79 were “dry”, 50 were heifers and 19 calves.
The Free State agriculture department bought 980 cows for the farm in 2012 but the FDC received only 791 in 2014. It’s not known where the other 189 are.
Since 2014, 321 more cows have disappeared, bringing the total number of missing animals to 510. Dairy consultants said a milking cow cost about R14,000, meaning cattle worth more than R7m have vanished.
Twenty-six cows were seen on the farm when the Sunday Times visited this week, while several Holstein-Friesian cows were wandering around the town. Vrede is said to be the only farm in the area that has Friesians.
Turnaround plan
The R65m turnaround plan, yet to be approved by the Free State legislature, includes:
● Increasing the herd to 1,200;
● Using arable land to grow feed;
● Establishing a pasteurisation and milk product facility;
● Building more cowsheds;
● Increasing milk storage capacity; and
● Increasing the number of local residents employed from 45 to 80.
A dairy farm consultant with operational knowledge of Vrede said that for the farm to make ends meet, each cow needed to produce at least 26l of milk a day.
“With the report showing that over R4m was spent on cattle feed, each animal would have eaten 17kg of concentrate [food] a day,” said the consultant, who did not want to be named. “That … should have them producing 40l of milk a day. Something is seriously wrong. The cattle are in a disgusting state.”
Some of the intended beneficiaries are bitter. Philemon Ngwena said those behind the project had driven them into poverty. “In 2012, these people came to us. We were told we could be farm shareholders, but only if we sold off our own cattle. They said if we owned cows we wouldn’t be accepted on the project,” he said.
After selling his 20 cattle, he waited to be called for training. “That was six years ago. Now look at us. We have nothing because we believed their lies. I didn’t even get R2 from them.”
Ngwena said the cows originally brought to the farm had disappeared in their hundreds. “Every day you see them in town outside the Standard Bank. Those should be our cows, helping us make money to support our families. Instead, other people own them.”
‘I have nothing’
Another beneficiary, Meshack Ncongwane, said he had also been told to sell his cows, but had been suspicious and kept some of them. “Thank God I was, otherwise I would have nothing, like so many others,” he said.
Irene Twala, a single mother of two, said she had lost everything after selling her 15 cattle. “They promised us a good life, but I have nothing. I work for R2,000 a month doing laundry at an old-age home. How can I support my family on that?”
Asked for comment, FDC CEO Ikhraam Osman said the corporation’s legal adviser, who dealt with the matter, was on leave. “A response will be sent to you next week.”
Neither E’tsho founding director Tlale Mokgadi nor Free State economic development spokesperson Kagisho Leteane responded to questions. Free State agriculture department spokesperson Moliehi Moeng referred questions to premier Sefora Ntombela’s office. The premier’s spokesperson, Tiisetso Makhele, said Ntombela was working with stakeholders to ensure the project benefited those it was intended to and would co-operate with investigations to enhance good governance and sound financial management.
We have nothing because we believed their lies. I didn’t even get R2 from them
Philemon Ngwena
Estina dairy farm beneficiary They promised us a good life, but I have nothing. I work for R2,000 a month doing laundry
Irene Twala
Estina dairy farm beneficiary Thank God I was [suspicious], otherwise I would have nothing, like so many others
Meshack Ncongwane Beneficiary who did not sell all his own cattle