The South African Social Security Agency (Sassa) confirmed it would be approaching the Constitutional Court soon to ask that they suspend the invalidity of its contract with Cash Paymaster Services (CPS), which distributes social grants to close to 18 million South Africans.
Raphaahle Ramokgopa, the executive manager for strategy and businesss development at Sassa, while briefing parliament’s portfolio committee on social development, admitted “we have failed”.
Ramokgopa told MPs that Sassa had considered six options – option one being that the CPS contract be extended – an option National Treasury would consider irregular expenditure since the Constitutional Court ruled in 2013 that the contract was illegal and invalid.
The other options were procuring the services from Grindrod Bank, which services the majority of social grant beneficiaries, procuring the services from all banks “wishing to comply with Sassa requirements”; procuring the services of all banks and using CPS to pay about 4 million recipients who receive their grants in cash; procuring the services of the South African Post Office; and option six being appointing a new service provider for cash payouts and using the the bank accounts of so-called “banked beneficiaries” to distribute the money.
Banks had indicated they needed at least 6 months to prepare for paying out grants, meaning grant beneficiaries would not get paid on April 1.
The option of using the post office was also ruled out since they did not have branches in deep rural areas.
National Treasury was strongly in favour of awarding a tender to a new service provider to distribute grants to cash beneficiaries, while beneficiaries with bank accounts would have the money deposited into their accounts.
Ramokgopa said this option could cause “panic among beneficiaries” and that it would take a new service provider time to set up the infrastructure for cash payments, meaning they would miss the April 1 deadline when the contract with CPS ends.
In the end, Sassa found that option one was the most feasible to ensure grant beneficiaries get their much needed payouts on April 1.
Ramokgopa said they would approach the Constitutional Court this month to “suspend the invalidity” of the CPS contract, but added that if they got the go ahead “any expenditure incurred would be irregular” and essentially illegal.
She said they would approach the chief procurement officer to deviate from normal supply-chain management processes.
In addition, they would appoint a negotiating team to approach CPS to discuss the extension of their contract for one year, but with “favourable conditions”.
CPS is a subsidiary of American company Net1, which has been accused of being responsible for illegal deductions from the grants of beneficiaries.
– African News Agency