Chief executive Thokozani Magwaza allegedly wrote to SA Post Office (Sapo) chief Mark Barnes requesting that the struggling parastatal take over the distribution of social grants when the Cash Paymaster Services (CPS) contract expires next month. The Constitutional Court ruled in 2014 that the contract had been awarded irregularly.
Magwaza, who was appointed in June last year, allegedly tried to withdraw the letter when Dlamini became aware of it. The letter was allegedly sent after the deadline for the submission of bids. Sapo is a bidder.
A Sassa insider said Dlamini was so livid with Magwaza’s action that she did not include him in a delegation that met President Jacob Zuma on Sunday. The meeting was apparently to brief Zuma on the grants payment debacle.
Social Development spokesperson Lumka Oliphant would not be drawn on Magwaza’s alleged pending suspension, saying the department had to establish the authenticity before deciding on a course of action.
“It would be important for the minister to have an audience with Mr Magwaza to hear if he has any knowledge of the letter as this is the first time the letter is brought to her attention,” she said. “It is true that the minister briefed the president for the first time on Sunday and took two officials from Sassa.”
Oliphant admitted that Magwaza was not part of Dlamini’s delegation that met Zuma. She said nothing should be read into this as “this is no way an indication of anything because neither the director-general nor the chief of staff were part of the delegation”.
In the letter, which The Star has seen, Magwaza asks Barnes if the Post Office would be able to help distribute the social grants from next month.
“Should it be possible, a transitional arrangement could be entered into through an intergovernmental agreement, which would not necessarily require procurement process,” he wrote.
It’s unclear if this would have been a short-term or long-term arrangement.
He adds that Sassa was looking at various options to ensure that social grants are paid beyond April 2017, “while at the same time positioning Sassa to be the paymaster in the future”.
Last week, The Star reported that Dlamini and Finance Minister Pravin Gordhan were headed for a collision course after the latter advised that the extension of the CPS contract was not a viable option. Gordhan allegedly wants a new contract awarded to commercial banks and Sapo, but that it should “exclude biometric verification, which would favour CPS and discriminate against other potential bidders”.
However, sources told The Star that Gordhan’s proposals were likely to be rejected by Dlamini when she finally decides to answer him. This was confirmed by Dlamini when she appeared before Parliament’s social development portfolio committee on Wednesday.
Magwaza confirmed the authenticity of the letter but said there was “absolutely nothing wrong”.
Approached for comment, Barnes could only confirm submitting a request for information and remained mum on receiving the letter. “It is not appropriate to discuss any further developments on the payment of the Sassa grants until the course of action is clear,” he said.
“Yes, there was a letter written to the Post Office CEO. The letter was not signed by myself but it was signed by one of the executive; I sanctioned it.
“The advice I got from the executive was that this is part of option 6, the concern for the executive what happens if option 1 falls through, what will be an alternative?
“The Post Office is a government entity. We had already engaged them before and we were carrying on, on what we have started,” Barnes said.
“Option 6 is part of the interim arrangement, Sassa has not moved from distributing grants itself, it has not moved from the stance that says we want to participate in the NPS space.”
Department of Telecommunications and Postal Services spokesperson Siya Qoza said they were happy the parastatal had submitted bids. “We believe it’s in line with the turnaround ICT policy and will play a significant role in the delivery of services.” He said it would be improper for the ministers to meet and discuss the matter.