The agriculture department withheld a R53m grant to the Free State for the controversial Estina dairy project because it could not provide a feasibility study, business plan or water-use licence.
But the national department was initially sold on the idea, and was excited that it would benefit 100 farmers in the Vrede area. It approved the funding on this basis but later withdrew it after National Treasury informed them that the project was dodgy.
This is according to Elder Mtshiza, the agriculture, land reform and rural development programme management co-ordinator.
Mtshiza said representatives of the Free State agriculture department approached them in 2013 for funds from the Comprehensive Agricultural Support Programme (Casp) grant.
The hearing continues.