Johannesburg - Cash Paymaster Services (CPS) has twice
given government a two-day ultimatum to agree to its demands to ensure grant
payment is not disrupted, the Constitutional Court heard on Wednesday
David Unterhalter, appearing for Freedom Under Law, told
the court that the company on December 28 told the South African Social
Security Agency (Sasssa) that unless it agreed to an extension of its contract
it would start dismantling its systems.
He submitted that this was the stance of a company that
felt secure in its bargaining power vis-a-vis the South African state.
"The two-day threat in December is a clear manifestation of their power
and it is precisely that power that we propose the court to discipline,"
Unterhalter argued on behalf of the rights group.
FUL, as well as the Black Sash, were arguing before the
court on Wednesday that it should resume its supervision of the grant payment
system, which is hanging in the balance as Sassa finds itself unable to take
over from CPS when the company's contract expires at the end of the month.
Unterhalter then referred to an affidavit made by Net 1,
the holding company of CPS, that unless Sassa agreed to a new contract on its
terms on Wednesday, it would not be able to pay out grants to 17 million
beneficiaries at the end of the month.
Read also: CPS talks hinge on Treasury agreement
The company is also demanding an increase of its
administration fee from R16.44 per grant to at least R22 to allow for
inflationary adjustments. The increase was on Tuesday dismissed by National
Treasury as bearing no relation to the consumer price index.
Unterhalter argued that the Constitutional Court had the
power to extend CPS's contract as an emergency measure, since the company
incurred a constitutional duty when it signed up to carry out a function of
state that guarantees the rights of beneficiaries.
Judges questioned whether the court indeed had the power
to keep intact a contract that was only valid until April. The advocate replied
that there was scope to do so. He proposed that the court could extend the
order by which the court had suspended an earlier ruling, handed down in 2013,
that the deal was invalid because of tender irregularities.
A lawyer for Corruption Watch argued for the same
solution.
Judge Edwin Cameron suggested that rather than use this
formula it would be "more candid" not to extend a period of
suspension because the contract to which it pertained was gone, but would for
compelling reasons impose a contract on CPS to continue grant payment in April
and beyond.
FUL has argued that any future contract should, contrary
to CPS's demands, be stipulated by the court to be of "no benefit",
in other words that the company does not make a profit.
It argued that CPS should not be allowed to make financial
gain from an extension of a contract that was found to be invalid.
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