CPS boss adamant Sassa deal can't go through without an increase

2017-03-16 16:36
CEO of Net1 UEPS Technoologies, Serge Belamant. (Supplied)

CEO of Net1 UEPS Technoologies, Serge Belamant. (Supplied)

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Johannesburg - Cash Paymaster Services (CPS) boss Serge Belamant is adamant that any deal signed with the South African Social Security Agency (Sassa) must benefit his company and its shareholders.

"We are not government, we are a company, we work for profit," Belamant said on the sidelines of the Constitutional Court hearing into an application brought by human rights organisation Black Sash on Wednesday.

The organisation submitted an application for the court to ensure that Sassa comply with its constitutional obligations to provide social assistance in a lawful manner, and to protect grant beneficiaries from unlawful depletion of their grants.

Freedom Under Law, which had applied to intervene in the matter, had also made submissions to the court saying it not only supported Black Sash's request, but also wanted the court to make an order stating that any new contract Sassa enters into with CPS after March 31 should not benefit the company financially.

Freedom under Law's counsel Advocate David Unterhalter SC said that CPS benefited from an unlawful contract for five years and that it was now constitutionally obligated to continue carrying out its services until Sassa found a new plan.

Belamant disagreed.

According to him, any new deal entered into with Sassa by CPS still needed to benefit the company and its investors. He said he expected the new agreement with Sassa to give CPS a profit margin of at least 18%.

Questions over dumped contract

"We've said from the beginning with this particular contract, we would make an average of 20% bottom-line profit which is not unreasonable if you think about it," he said.

"In fact that's actually low for my investors, they would prefer a 30% or 40% [profit]. Investors always want more, government always wants less.

"We are on around 17% – 18%. Going forward I want to maintain at least my 18% and I can't do it without the CPI increase."

Belamant's counsel, Advocate Alfred Cockrell, had argued in court that CPS would not be able to render its services if a new contract was not signed because CPS was not willing to continue working under the invalid one.

Cockrell also said CPS was not sure why an agreement reached earlier this month between the company and Sassa had been dumped by Treasury and an inter-ministerial task team. He wondered why the other state entities not trust Sassa's decision about the agreement.

The deal was supposed to guarantee the payment of social grants come April 1. Sassa and CPS had agreed to a two-year, fixed-price contract after three-day negotiations held between March 1 and 3.

However, the task team found that the deal should be terminated and fresh negotiations should start only if and when the National Treasury gave its prior written approval for the deal's violations of procurement rules.

Treasury had previously said it would only do so if the Constitutional Court gave it the go-ahead.

'Who can step into our shoes?'

The SA Post Office told the court that it was ready and willing to take over from CPS and confidently said it would take no more than a month for it to take over.

However, Belamant said he still believes no one can do as good a job as CPS has done and can still do.

"One thing we've proven [is that] we can do the job, nobody is denying that. Two, is there anybody else right now who can step in our shoes?

"The answer is no, except for the Post Office and the pigeons that they want to use. I think they want to fly the money with the pigeons, and that might work better than the way they are doing letters at the moment," Belamant said.

Earlier, the court had heard from legal teams representing Black Sash, Corruption Watch and Freedom under Law that CPS was constitutionally obligated to stay and help with the payments of the grants.

Belamant said the company would not walk away from Sassa, not because of what the lawyers were saying, but because CPS had built a relationship with the beneficiaries over the years.

"We are not going to simply move away. We still at the end of the day have a responsibility, and not because of a constitutional agreement. We have a responsibility because the people we pay, they've become our friends."

'We get applause'

He said because of this, CPS had a duty to be careful not to abuse grant recipients.

"When we go to a pay point and a CPS truck comes, we get a round of applause, every single month. And that does warm up your heart a bit because you feel great about these people. Because of that, they become very trustful of us, and then we've got to be careful that we do not abuse that. In other words, that you make sure that because they trust you implicitly, that you're never going to take advantage of that."

Belamant defended the use of grant beneficiaries' personal details for CPS subsidiaries to market their products, saying the recipients were not stupid and knew how to use their money in a shrewd way.

"One thing I've always said, poor people can't afford to be stupid otherwise the little bit of money they've got they'll just lose it. They are not stupid, they happen to be poor and very often they are not well educated. It doesn't mean that they are not shrewd, it doesn't mean that they do not know exactly how to take advantage of a situation. Don't ever fool yourself with this."

Belamant maintained that CPS would continue to render its services if the court granted an order allowing them to do so.

"We will continue to provide this service because we think it's the most important service for the country as a whole. That's as simple as that."

Read more on:    sassa  |  cps  |  serge belamant  |  social grants crisis  |  service delivery

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