Zuma ‘wanted deal even if it blew fiscus’
FORMER Treasury director-general Lungisa Fuzile has accused former president Jacob Zuma of having tried to push ahead with the controversial nuclear procurement project despite being clearly told that it would have blown the country’s fiscus.
Yesterday Fuzile returned to the stand at the Zondo commission of inquiry into state capture to continue his testimony.
Fuzile said the opposition of former finance ministers Pravin Gordhan and Nhlanhla Nene to the cutting of corners and the flouting of legislation by departments when procuring was one of the main reasons why they landed in Zuma’s bad books.
Fuzile said the two and Treasury officials’ reluctance to approve big transactions without due diligence frustrated Zuma and others in his government, who seemed to be personally committed to some projects.
The projects included the nuclear procurement project, the purchase of shares in Engen by PetroSA, matters relating to South African Airways including approvals, the Sassa grant contract, the Gupta-linked Denel-Asia matter and the closure of the Gupta family’s accounts by banks.
“These were big and significant projects,” Fuzile said. “If you just take the nuclear procurement, I cannot think of any other project that the South African government has ever embarked on in the 25 years or so post freedom.
“The conservative buy estimate could be about R1 trillion,” Fuzile added.
“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 jobs and asking tough questions, people got frustrated,” Fuzile said.
“They wanted to see them to the end and wanted commitments to be made.”
Fuzile 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 Gordhan had personally warned Zuma on the nuke project after the former head of state organised a meeting with Treasury and his advisers to insist that he wanted the controversial project, which Fuzile said 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.”
Fuzile said a team insisted on securing a detailed assessment of the impact of the project on the fiscus in terms of affordability and what impact it would have on the entire 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,” Fuzile said.
He said there was no entity with a balance sheet large and strong enough to be able to support the raising the amount of debt that was required, so the government would have had to inject money into any entity to implement the nuclear programme.
Tomorrow former finance minister Des van Rooyen is set to cross examine Fuzile.
The nuclear project had to be paid off through tariffs and tariffs affect every household and business
Lungisa Fuzile Former Treasury DG