Gangster State

allegations of dodgy financial dealings.^19
Like Bloem Water, the FDC received some of the FSHS’s unspent
funds. In late 2013 , the provincial government approved the transfer of
up to R 100 million from the housing department to the FDC ‘to
facilitate the pilot implementation of alternative building technology
(ABT) in a people’s housing process (PHP) project in Thembalihle Ext
4 , Vrede’, according to a government gazette from March 2014. The
FDC was to act as ‘account administrator’ for the construction of 1 000
subsidised houses in the eastern Free State town.^20 This was all part of
the plan. ‘Paying the money to the FDC was a much safer bet, seeing
as Ace was very close to the FDC’s leadership,’ one of my sources
alleged.
The department subsequently transferred just over R 50 million to the
FDC in 2013 / 14 ,^21 and another R 12 million the following financial
year.^22 For some inexplicable reason, in its 2013 / 14 annual report the
department stated that the money was meant for the ‘procurement of
land’.^23 Yet an earlier township planning report confirmed that the site
for the proposed houses was situated on a portion of the farm
Krynaauwslust, which belonged to the local municipality.^24 Therefore,
there appears to have been no need to procure any land for the
proposed development. Another portion of the same farm was later
controversially leased to the Gupta-linked Estina for Vrede’s disastrous
dairy venture.
Meanwhile, the auditor-general picked up that all was not well with
the department’s strategy of transferring unspent grant money to third-
party entities such as the FDC and Bloem Water. ‘The transfer of a
portion of the human settlement development grant (HSDG) to the
receiving entity was not made in accordance with section 16 ( 2 ) of