Johannesburg - South Africa’s government, set to miss a deadline to
appoint a new distributor of welfare grants worth about $10.3 billion a
year to more than 17 million people, asked aspirant bidders to an information
session as the end of a contract with Net 1 UEPS Technologies looms.
The South African Social Security Agency, which oversees the monthly
payment system, took the first step toward appointing a new distributor at the
session in Pretoria on January 13. It’s likely to take several more months to
choose a winner, which will then have to put the necessary payment systems in
place. The South African Post Office said it plans to bid.
“The tender briefing was about a request for information,” Kgomotso
Diseko, a spokesman for the agency, said by by phone. “Some of the content
we are just finalising and then we will issue a statement. We are not ready
yet” to select a bidder.
While the Constitutional Court ruled in November 2013 that the process of
awarding the contract to Net 1, which expires at the end of March, was flawed
and the tender should be issued afresh, the process was delayed by legal
wrangling. The welfare system has helped bolster support for the ruling African
National Congress and interrupting the payment of the grants - the only form of
income for many poor families - could spark protests and wouldn’t be
politically palatable.
Sassa has said it won’t be ready to take over the distribution itself.
Barclays Africa Group declined to comment on whether it was bidding for
the contract, while Standard Bank Group, Nedbank Group and FirstRand’s First
National Bank, the country’s other biggest lenders, didn’t immediately respond
to questions. The Post Office said it’s best-placed to distribute grants.
“We have the largest footprint by far and the reach in rural areas,” said
Mark Barnes, the Post Office’s CEO, who attended the January 13 briefing.
“There will be a transition period for a new service provider to take over. I
think July or August would be a realistic timeline. It could even be awarded to
multiple service providers, but it should include the Post Office.”
Read also: Net1 subsidiary retains Sassa contract by default
Net 1 CEO Serge Belamant wasn’t available to comment and didn’t
immediately respond to e-mailed questions. Lumka Oliphant, a spokeswoman for Social
Development Minister Bathabile Dlamini, didn’t answer her mobile phone. If need
be, the Net 1 contract will be extended, the Social Development Department said
in December.
The Democratic Alliance, the main opposition party, said Dlamini had
intentionally stalled the bid process and that the livelihood of some of the
country’s poorest people was being placed at risk.
“There is still no clarity as to who will perform this crucial task,”
Lindy Wilson, the DA’s shadow deputy minister for social development, said in
an e-mailed statement. The minister “should stop the pretense, come clean and
admit that her department and the South African Social Security Agency have
already renewed their invalid multi-billion rand contract with Net 1.”