The invalid Cash Payment Services (CPS) contract may be extended for a further six months if the South African Social Security Agency’s (Sassa) gets its way — yet the Constitutional Court ruled that the contract is to end on March 31.
The extension is contained in the latest Sassa report to the Constitutional Court, filed less than a month ago, and does little to allay fears that millions of beneficiaries will face another payment crisis created by the agency.
This time last year Sassa claimed that the only way to ensure that grants are paid would be to extend the invalid CPS contract.
This was followed by a year of discussions between the South African Post Office (Sapo) and Sassa, guided by Parliament, the Constitutional Court and an interministerial committee.
After the Constitutional Court declared in 2013 that the contract for the provision of social grants was unlawful, the parties have been back to court several times about how Sassa structures a new deal for the smooth transition from the CPS contract, which was extended for another year in April 2017.
The latest push for another extension coincided with the service agreement signed between the Post Office and Sassa on December 8. The agreement was seen as a breakthrough, which would finally see the back of CPS and the emergence of a new service provider.
But the need to distribute cash to grant recipients still keeps the door open for CPS.
Sassa’s report states that the Constitutional Court will be approached to extend the invalid contract once again while the Post Office contract is being phased in. The treasury will also be asked to approve a deviation for six months.
Sassa’s spokesperson Tshediso Mahlaku confirmed the agency had requested the Constitutional Court to grant the extension and that they would only approach treasury once that request had been granted.
“For purposes of advertising the cash payment contract, Sassa followed normal procurement processes. This does not require any approval from treasury,” he said.
Treasury said it was not involved in the new contract Sassa had advertised and the agency had not requested a deviation for the extension of the CPS contract.
Even if the Constitutional Court does not agree to another extension of the invalid contract and treasury doesn’t agree to a deviation, CPS may still get a cut of the social grants deal. A tender to pay cash to beneficiaries at distribution points has been advertised and is open to everyone, including CPS.
The Post Office is due to take over the grant payment system for the next five years. But the agreement is short on detail about how all payment channels would be merged with the Post Office. This raised alarm bells for Black Sash’s national director, Lynette Maart, who is concerned about the disbursement of grants using cash-in-transit vans.
“It’s [the contract] not clear if Sapo or another service provider will provide the vans. This may affect over two million beneficiaries and, without a clear indication, we may be sitting with the same problem that landed us here,” she said.
But tender or not, Sassa wants CPS. The agency says its primary approach is to ensure that a new cash payment service provider is appointed, which will include a continued role for CPS for at least six more months.
“The transition process will cover the phasing out of CPS and the phasing in of Sapo for electronic payments and a new service provider for the cash payment,” reads the report.
“To this extent, a formal application for the suspension of declaration of invalidity and subsequent extension of the contract with CPS will be lodged with the Constitutional Court.”
In December, Sassa advertised the tender for a new cash-payment service provider. The cost was not disclosed. The closing date is January 19. The tender description in the Government Gazette is light on details but the Mail & Guardian understands that the successful bidder will be required to have the necessary infrastructure, equipment and technology as well as pay-point management skills, its own security and the ability to communicate with beneficiaries.
According to the Sassa report to the Constitutional Court, the bidder should have security and mobile ATMs or payment machines, load money, provide payment cards and ensure both an online and an offline service — all the services offered by CPS.
CPS said it may bid, depending on the commercial viability and the attractiveness of the terms.
Bathabile’s day of reckoning
In less than a month Social Development Minister Bathabile Dlamini will be facing Judge Bernard Ngoepe to answer to the allegation that, when she appointed workstreams that would report directly to her, she created a parallel process that led to the grants payment crisis.
According to her statement filed to Ngoepe, and which the Mail & Guardian has seen, Dlamini sticks to her claim that she did everything in her power to ensure that the crisis would be avoided.
The workstreams were meant to establish the most efficient way for the South African Social Security Agency (Sassa) to pay social grants yet produced reports lauding the Cash Paymaster Services (CPS) system as the best.
In her statement — which appears to be riddled with contradictions — Dlamini asserts that the Sassa Act gives her sweeping powers to hire and fire chief executives who carry out functions under her direction and to her approval.
In her six years in control of the agency there have been six chief executives.
“Sassa may only enter into an agreement … with my consent. The CEO [chief executive officer] is responsible for the management of Sassa, subject to my direction. My role requires a measure of involvement in the day-to-day operations of Sassa,” reads her statement.
Yet a few paragraphs further on she denies having any knowledge of how the workstreams were appointed by Sassa — despite the fact that they emanated from a ministerial advisory committee she established in 2013.
Dlamini says she only advised Sassa which workstream leaders should be appointed but did not interfere with the bid adjudication committee that selected the workstream leaders. “It is true that I directed that the specified workstream leaders be appointed by Sassa … It is correct that I instructed that the specified individuals be appointed to lead the workstreams,” reads her statement.
She denies having any involvement in the bid adjudication process yet in subsequent paragraphs she admits having advised the previous chief executive, Virginia Petersen, on the process Sassa should follow in appointing the workstream members.
Most likely to raise eyebrows is how she says that she believed the work of the workstreams was urgent — and yet for months claims she had no idea what they were doing.
Dlamini also asserts she was made aware that Sassa would not meet the April 2017 deadline of appointing a new service provider at a meeting in October 2016, but puts the onus of responsibility on Sassa executives.
Yet her own submission states: “I believed it necessary that I keep abreast of the developments in the workstreams and the progress within Sassa to realise the objectives of bringing social assistance payment services inhouse. To this end, I frequently liaised with Ms Mvulane [project leader of workstreams] in order to get progress updates.”
Ngoepe is likely to seek answers on all the seeming contradictions in her statement when the inquiry sits on January 22. — Athandiwe Saba