CPS declines to reveal terms of new contract with Sassa

File picture: David Ritchie/Independent Media

File picture: David Ritchie/Independent Media

Published Mar 15, 2017

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Johannesburg – Cash Paymaster Services (CPS) cannot publicly disclose how much it wants to charge the South African Social Security Agency (Sassa) for a new contract to distribute welfare grants – at least not until it signs on the dotted line.

This was revealed by Advocate Alfred Cockrell SC, who was representing CPS at the Constitutional Court on Wednesday on the Sassa matter.

The court was hearing application for direct access by non-governmental organisation Black Sash seeking the reinstatement of the court's oversight role over how grants reach some 17 million beneficiaries.

Sassa declared that it would not be able to in-source the function by April 1, as it did not have the capacity, and thus sought to extend the contract with Cash Paymaster Services (CPS) for a further two years.

The contract, which was found to be invalid by the Constitutional Court, expires at the end of the month. The court questioned Cockrell whether CPS wanted a blank cheque as it appeared that the paymaster wanted it to authorise a new contract when their counsel would not tell them the price CPS was asking.

Cockrell told the court that the terms of the new contract were not based on the R16.44 fee per beneficiary, but on a lump sum that would have to be agreed upon for the grant payment service.

In essence, Cockrell argued that the new contract meant that even if CPS only had to pay one beneficiary, it would still have to paid the full lump sum. "Let's cut to the chase, your client wants to be paid more?" asked Chief Justice Mogoeng Mogoeng.

Cockrell argued that CPS was asking for a consumer price inflation-adjusted figure in the new contract as it had not charged any increase over the last five years, adding that he would provide the details of the asking figures of CPS at a later stage.

"We have a draft contract [with Sassa] that is not in front of the court. But I would have to consult with my client and get that information before I present it to court," Cockrell said.

"CPS had no objection to oversight, to providing finances and motivating for what would be reasonable increase in the contract."

Cockrell had earlier found himself against the odds as he argued the legal basis of entering into a new contract with Sassa. Chief Justice Mogoeng Mogoeng was leading the full bench of the 11 Justices.

Cockrell said the "no benefit" rule would not apply if there was a new, lawful contract with Sassa, adding that CPS managed about R11 billion for the social security agency and that it would not be able to do so without a contract and payment from National Treasury.

"There are two possibilities before us. One is to extend the existing agreement [with Sassa] or order a new contract that takes effect from 1 April. Any contract between CPS and Sassa from 1 April has to be a valid, lawful contract," Cockrell said.

"CPS cannot discharge its constitutional obligations without approval from Treasury. In the case of a new contract, it would not comply with procurement requirements unless directed by the Court." The court reserved judgment after hearing argument from the various parties.

African News Agency

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