No reason for 2-year Sassa-CPS interim contract - Trengove

2017-03-14 17:09
Bathabile Dlamini (Netwerk24)

Bathabile Dlamini (Netwerk24)

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Johannesburg - Social Development Minister Bathabile Dlamini and Sassa have failed to make a compelling case as to why an interim contract with Cash Paymaster Services should last two years, Wim Trengove, SC, wrote in a legal opinion.

Sassa CEO Thokozani Magwaza applied to the Constitutional Court in February asking for a one-year contract, Trengove wrote.

This has emerged in a confidential legal opinion by Trengove to an inter-ministerial task team appointed to ensure no interruption to the payments of grants come April 1, and to oversee Sassa's response to the Constitutional Court's questions.

Trengove criticised the SA Social Security Agency (Sassa) for changing its tune on the period of the contract following a meeting with CPS earlier this month.

The plan to enter into a two-year interim contract with CPS seemed to have emerged from discussions between the two parties over three days, Trengove said.

"As recently as 8 February 2017, Sassa proposed an interim arrangement with CPS of only 12 or a maximum of 18 months," he said.

In-principle agreement

This was based on three letters, two of which were from Dlamini to Finance Minister Pravin Gordhan and from Sassa CEO Thokozwani Magwaza to Treasury director general Lungisa Fuzile. They were dated February 1, 8, and 7.

Trengove submitted his legal opinion to the task team on March 11, eight days after Sassa and CPS reached an in-principle agreement for the company to continue making grant payments after March 31.

Sassa started negotiations with CPS on March 1. It was forced to dump the in-principle agreement after the task team of Dlamini and ministers Pravin Gordhan, Siyabonga Cwele, Malusi Gigaba, David Mahlobo, Naledi Pandor, and Jeff Radebe rejected it.

The task team was appointed on March 8, four days after President Jacob Zuma met Dlamini and Gordhan to discuss the crisis and order them to solve it. Zuma left for Indonesia a day later.

It is still unclear who appointed the task team.

Trengove said Sassa did not qualify for exemption from the general requirements for a deviation from the normal competitive bidding process because its predicament was self-created.

Given that grant payments could not be interrupted, Trengove said the illegality of the CPS contract could be limited by shortening its contract period. He said Sassa did not seem to need two years to find a new service provider.

"The method by which Sassa contracts with CPS will be unlawful for want of compliance with the requirements of a competitive bidding process. I must minimise the extent of its breach of this requirement by entering into an interim contract with CPS for no longer than is reasonably necessary to appoint a new contractor by a competitive bidding process."

Treasury had said it would not approve any new deal with CPS unless the Constitutional Court approved it.

Read more on:    sassa  |  cps  |  bathabile dlamini  |  social grants

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