If there's no new contract by Thursday, grants may not be paid – CPS

2017-03-14 21:18
CEO of Net1 UEPS Technoologies, Serge Belamant. (Supplied)

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

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Johannesburg - If the South African Social Security Agency (Sassa) and Treasury do not agree to a new interim contract with Cash Paymaster Services (CPS) by Thursday, the social grants distributor may not be able to pay more than 17 million beneficiaries on April 1, it says.

Speaking to 702 on Tuesday evening, Serge Belamant, the executive chairperson of CPS's parent company Net1, told the station that the company needed at least 12 working days to ensure that it would be all systems go come April 1.

"If you work backwards from the 1st day of April, we need to ensure that the process starts 12 days prior to that in order for us to, number one, have the money so we can put it into beneficiaries' bank accounts so they can withdraw it."

Also read: There is Sassa money, just no contract - Treasury

He said money needed to flow from Treasury to Sassa and from Sassa to a number of banks including the Reserve Bank before it made it into the hands of millions of beneficiaries across the country.

"So it is not a simple exercise. It takes 12 days, so that takes us to Thursday, and on Thursday we need to have that process in place and working, because if the process starts falling behind time, then to be quite honest, the fact that we want to pay grants on the 1st of April, we simply won't be able to do it," Belamant said.

This was the first major problem CPS was currently dealing with. The second problem was that there was no agreement in place to oversee CPS's distribution of almost R11bn to the right recipients after the current contract comes to an end on March 31, he said.

'Watershed moment'

"The bottom line is, that contract terminates on the 31st of March, which means that on the 1st of April there will be no contract governing what we do.

"And as a public listed company, I would be very surprised if government is going to be transferring funds of R10bn/R11bn to us without a contract, which means we need to have some form of engagement, some form of contract that says that we will be responsible for that money and responsible to pay it out."

Also read: Game of chicken grips Sassa crisis

He described Thursday as a "watershed" moment for all parties involved as it would determine whether or not South Africa's most vulnerable would be receiving their monies.

"Thursday, to me, is a watershed of 'can we or will we be able to pay people on the 1st of April or not?' To be quite honest, it's out of our hands because even if we wanted to do it, we couldn't," Belamant said.

He reiterated submissions he had made to the Constitutional Court last month that CPS had tried to give Sassa an idea of how long it would take for the agency to transition out of the contract and take over.

"It would take the best of the best around 18 months minimum to be able to perform the same job that we do today, and I'm not talking about half a job, I'm not talking about cutting down the service delivery, cutting down pay points, removing biometric, going back to an electronic voucher. I'm talking about a similar system of what we have today, a pristine system. It would take at least 18 months for anybody to come into the same thing," he said.

'Now we wait'

He said this was the reason CPS and Sassa had spent three days negotiating a new agreement: in order to give the agency sufficient time to issue tenders if they need to, award those tenders and then implement or appoint a new contract, or to do it themselves.

Although it was possible to do this in 18 months, "even two years could be cutting it short", he said.

Also read: I made every reasonable effort to comply - Dlamini tells ConCourt

An inter-ministerial task team has since thrown out the deal, saying it should be terminated and fresh negotiations should start only if and when National Treasury gave its prior written approval for the deal's violations of procurement rules, Wiseman Magasela, who took up the acting CEO position in the CEO's absence, told the ConCourt in an affidavit filed this week.

The task team included Finance Minister Pravin Gordhan, State Security Minister David Mahlobo, Home Affairs Minister Malusi Gigaba, Telecommunications Minister Siyabonga Cwele, and Science and Technology Minister Naledi Pandor.

The task team was appointed on March 8, four days after President Jacob Zuma met Dlamini and Gordhan to discuss the crisis and ordered them to solve it.

"As we speak, unfortunately, there is no agreement by definition," said Belamant.

"So now we await what is going to happen between Sassa and Treasury and very possibly, the Constitutional Court tomorrow," he said.

Read more on:    sassa  |  cps  |  social welfare

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