The new tender process for the distribution of social grants will take at least eighteen months to complete, Net1 CEO Serge Belamant has said.
The technology company released its third-quarter results on Friday and, in a conference call with investors, Belamant said even the 18-month estimate was “being optimistic because it will probably take longer than that”.
In April, the Constitutional Court ordered the South African Social Security Agency (Sassa) to reopen the tender and appoint new members to its adjudication committee, concluding a two-year legal battle between Net1 subsidiary Cash Paymaster Services (CPS) and Absa subsidiary AllPay.
AllPay took CPS to court after Sassa had awarded CPS the five-year R10 billion welfare tender to distribute social grants to 15 million beneficiaries, and alleged foul play.
CPS is also being investigated by the US Department of Justice under the Foreign Corrupt Practices Act but Belamant said it had received no update regarding the case.
Both CPS and AllPay have said they would bid in the new tender process.
Belamant said Sassa would probably engage outside specialists to avoid repeating mistakes.
He said people misunderstood the court ruling and expected Sassa to initiate a new tender process soon, but he said Sassa first had to formulate exactly what it wanted out of the new tender and said this could take up to twelve months. He also said if it didn’t win the tender, there would be a phase-out period and “during all of this we will still be the people running the tender”.
Belamant also claimed that CPS had managed to save the government in excess of R3 billion per annum with the removal of more than a million beneficiaries.
Not being put off by doing business with government, Belamant said the technology company would remain an integral supplier to the South African government, despite the controversy around its 2011 welfare tender.