The SA Social Security Agency on Wednesday formally entered into negotiations with Cash Paymaster Services (CPS) to renew its contract to distribute welfare grants, though National Treasury has signalled it could not sanction the last-minute deal.
“The talks started this morning,” Zane Dangor, the director-general of Social Development, said on the sidelines of a briefing to Parliament’s portfolio committee on social development
The silence of the ANC on SASSA is deafening considering that during election campaigns this is held up as one of its key achievements
— Mbhazima Shilowa (@Enghumbhini) March 1, 2017
Dangor confirmed that Sassa lodged a statement of intent to seek a new contract with CPS with the Constitutional Court – which declared their current contract invalid in 2014 – on Tuesday but later withdrew it.
“It is my understanding that they needed to file supplementary documentation, and will approach the court again later,” he said.
Dangor also confirmed that Sassa would not seek the court’s permission for a new contract, but would instead appeal to National Treasury to allow a deviation from public finance rules for a procurement process that involves a single bidder.
“That is the approach, it then hinges on Treasury’s agreement,” he said, before excusing himself to return to Pretoria for a meeting with President Jacob Zuma on the impending welfare crisis.
Zuma told television reporters he found it “a little bit irresponsible not to deal with the issue because we knew it was coming as it was coming”.
“We said no pensioner must not earn on that day.”
It sees the state with no mechanism to continue payment of welfare grants to more than 17 million beneficiaries beyond April 1.
The Constitutional Court declared Sassa’s contract with CPS invalid in 2014, but subsequently suspended its ruling for the duration of the contract to prevent the grant payment system being disrupted. The contract runs out at the end of the month.
But on Tuesday, Sassa officials informed Parliament’s watchdog public accounts that it would not seek the court’s permission to deviate from the order as it was not technically extending the contract with CPS but seeking a new agreement.
It was expected to file a full disclosure motion to the court, based on the advice of advocate Wim Trengove, who has penned a legal opinion stating that Sassa was not months but years away from being ready to take over grant payment itself as it had intended.
Sassa officials reluctantly conceded before Scopa on Tuesday that the crisis was self-made, prompting the chairman of the committee, Themba Godi, to say it was “a ruse” to leave no option but contracting again with CPS.