Picture: David Ritchie/ANA Pictures

Parliament - MPs on Tuesday accused the South African Social Security Agency (Sassa) of dragging its feet in negotiations with the South African Post Office on taking over grant payments in a bid to force an extension of Cash Paymaster Services's controversial contract with the state entity.

Sassa told Parliament's watchdog Standing Committee on Public Accounts it was preparing to go out on open tender for certain functions pertaining to the payment of some 17 million welfare grants, as it was not persuaded that the post office had enough outlets to reach all beneficiaries. 

Sassa project leader Zodwa Mvulane said SAPO only had 2,600 offices, while at the moment Sassa had 10,000 grant payment points. She also raised concerns about potential complaints about SAPO's lack of a full banking licence. She said there was a risk that this could be raised by competitors and furthermore, it would be bad form to forsake proper procurement process to give preference to the post office.

"Hence we are not emphatic about them," Mvulane told the African News Agency (ANA).

But MPs countered that SAPO had given public assurances that it was confident it could reach even into remote rural areas, and said Sassa's where necessary through partnerships with local shops, from supermarket chains to small supply stores.

ANC MP Nthabiseng Khunou said: "They have reassured us here in Parliament, and according to them, SAPO, they are everywhere, even in the rural and they have said to where they have no post office, they are working with supermarkets and even small shops, so according to them in terms of spread, they can do that.

"And according to you, you have said it is a problem for them."

Khunou said the contradiction made her wary that Sassa would fail to sign a new service provider, and again find itself insisting that only CPS was able to pay grants when a deadline imposed by the Constitutional Court expired next year.

"We need to see how we help Sassa get rid of CPS through SAPO.... at the end of the day at this time next year, we will still have CPS, that is the uncertainty you are leaving us with," she said.

Fellow ANC MP, Mnyami Booi, warned acting Sassa CEO Pearl Bengu not to mislead Parliament on the agency's plans and said proof of its intentions to migrate to a new service provider would be a letter informing CPS of its intentions not to renew the current contract.

You have a very good story. But we have to hear where CPS is getting out of the system. Where is the letter that says CPS is out, they are out of our system? That letter you don't have. 

"You are going to tell us CPS must come because CPS has the skills."

Bhengu said she was meeting with the CEO of CPS to discuss the termination of their contract, adding: "I know for a fact that the phase in and phase out process is taking place."

Booi, however, insisted that Sassa's preparations were not taking place at a pace commensurate with the timeframe of one year given to it by the Constitutional Court to find a new service provider.