Johannesburg - The SA Post Office must handle the distribution of social grants from April 1, the SACP said on Wednesday.Social Development Minister Bathabile Dlamini should not extend the contract of the current service provider, Cash Paymaster Services (CPS), to distribute grants to more than 17 million people, spokesperson Alex Mashilo said in a statement.Finance Minister Pravin Gordhan announced in his Budget on Wednesday that the Postbank had been granted a provisional banking licence. “As part of fighting corruption, the department must not perpetuate the illegal tender of social grants distribution that was awarded to Cash Paymaster Services,” Mashilo said.The Post Office was one 18 bidders that submitted proposals to take over the contract from April 1.However, in a letter Dlamini wrote to Treasury, dated February 8, she said she had been advised that the Post Office did not have the necessary technology and expertise, or banking licence. She was concerned that the Post Office did not have the necessary infrastructure to process payments, especially in rural areas.MPs have criticised Dlamini for failing to find a new contractor to take over the lucrative tender to distribute grants worth R120 billion a year.On Wednesday, she told Parliament’s social development committee that the department would not meet the deadline for a new service provider to take over. The Constitutional Court ruled in 2014 that the contract with CPS was invalid, but suspended the order to give the department and the SA Social Security Agency until the end of March 2017 to insource the distribution of grants. The SACP welcomed the no increase on VAT which Gordhan announced in his Budget. The party raised concern about the 30 cents fuel levy increase.It would affect all South Africans, especially the workers and poor who spent a significant proportion of their wages on transport, and increase the prices of consumer goods.Mashilo said they welcomed the new personal income tax rate of 45% for those earning more than R1.5 million a year.