Lungisa Fuzile at the state capture inquiry in Parktown. Picture: Dimpho Maja/African News Agency(ANA)
Lungisa Fuzile at the state capture inquiry in Parktown. Picture: Dimpho Maja/African News Agency(ANA)

Fuzile tells inquiry he was asked to allow illegal CPS contract to continue

By Zintle Mahlati Time of article published Feb 18, 2019

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Johannesburg - Former National Treasury director-general Lungisa Fuzile says he was asked to allow for the SA Social Security Agency (Sassa) to continue with its controversial contract with Cash Paymaster Services(CPS). 

Fuzile told the Zondo commission on Monday that he got a letter from Sassa requesting that he allow for deviation in the validness of the contract with CPS. 

He said he was appalled and could not agree to do so. 
In 2012 Sassa awarded an illegal contract to CPS for the provision of social grants. The Constitutional Court ruled that this contract was unlawful and that Sassa should make should reissue its tender. But in 2015, Sassa said it would not issue a tender but would instead personally take-over the distribution of social grants. 
As the deadline loomed for the end of the contract with CPS, Sassa told the court that it would not be able to take over the payment of social grants as it was not ready. This led to the March 2017 decision where the Constitutional Court was left with no choice but to extend the CPS contract for a further six months. 

Fuzile said the issue did come up in Cabinet about the need to provide deviation, but he was able to fight off efforts to go against orders from Constitutional Court. 

He also told the commission about the Denel/VR Lazer Asia deal which was an attempt for a joint venture between state-owned arms manufacturer Denel and Gupta linked VR Lazer. 

He said there were huge risks if this deal went through including the risk of intellectual property loss and the huge costs of that company would face. 

Fuzile also spoke about his resignation as the DG at  Treasury which happened after the removal of former minister of finance Pravin Gordhan and his deputy Mcebisi Jonas. 

 He said he did not see that he could make a positive difference for the department and decided to end his term early. 

Fuzile has concluded his testimony. Other Treasury officials are expected to testify on Tuesday. 

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