The Department of Social Development and the South African Social Security Agency (Sassa) are not backing down on plans to extend the Cash Paymaster Services (CPS) tender despite warnings by Treasury that such a move would expose the government to lawsuits.
The Sunday Independent can reveal that Sassa has ruled out all other options to distribute grants to 17 million beneficiaries by April 1, except extending the CPS contract. This is contained in the latest minutes of the agency’s audit committee meeting on Tuesday.
According to the record of minutes, seen by The Sunday Independent, Sassa had considered six “short-term options”, and discounted the Treasury’s option to “use the banking sector to those beneficiaries with bank accounts and appoint a service provider for cash distribution”.
“Sassa is of the view that the option may cause panic and huge influx of beneficiaries, which requires huge capacity and infrastructure,” the minutes state.
“This option, too, will not enable Sassa to pay on April 1, 2017.” Sassa told Parliament on February 1 that it planned to extend the CPS contract.
The Sunday Independent understands that this faces stiff opposition from within ranks in the committee as some members are unhappy with the decision. Sources said the members were aggrieved that the decision was presented to them as a done deal as there had not been deliberations by the committee.
“These minutes are a record of what theywere told, and not necessarily what they are in agreement with,” said a Sassa source who attended the meeting.
Social Development Minister Bathabile Dlamini was said to have been in favour of extending the CPS contract as it would minimise the disruption of the distribution of grants as it “creates a conducive environment without excluding other service providers”, according to sources close to the minister. Dlamini also discounted using the banks because she felt the institutions did not have footprints in all areas of the country.
Apart from facing stiff opposition internally, Sassa and Dlamini face a legal hurdle in their bid to reappoint CPS as the service provider. They need to explain to the Constitutional Court why they failed to adhere to the court’s order in 2014, which had instructed them to advertise for new contractors to bid for the tender.
Earlier last week, the Treasury warned that the department and Sassa could be exposed to legal challenges should they persist with the CPS contract. However, Dlamini said in a statement on Friday that although all options had pros and cons, it was her responsibility to decide which option would ensure that beneficiaries received their grants on April 1 without interruptions.
Later on that day, the ANC Women’s League (ANCWL) upped the ante when it said in a statement that the league “unashamedly rejects any proposal that the payment of Sassa grants to be outsourced to one of the major commercial banks”.
“The ANCWL supporters and members will not support any proposal to outsource payments of Sassa grants to any of the major commercial banks in SA. Support to such plan will be a conscious sabotage to the radi- cal socio-economic transformation agenda.”
But Dlamini and her colleagues at Sassa might first need to convince the committee members who are not in agreement with the preferred option to extend the CPS contract.
“The committee was as good enough as non-existent at the moment as it was not taken seriously, and its members looked more like puppets in the decision-making process of Sassa,” said the source.
“The committee has made certain recommendations, and those are never acknowledged. There is nothing that they recommend that is recognised.”