Johannesburg - Simmering tensions over the social grant contract blew up on Saturday when Social Development Minister Bathabile Dlamini and Finance Minister Pravin Gordhan met President Jacob Zuma at Mahlambandlovu in Pretoria to thrash out differences.
The Sunday Independent understands that Gordhan, who was accompanied by an official from Treasury, at some point threatened to stage a walk-out when he differed with Dlamini, who presented a new deal with Cash Paymaster Services (CPS), in which the company would be paid R17.64 for every beneficiary per month. Effectively, the SA Social Security Agency will pay CPS almost R300-million a month in the new deal. Annually, it would be R3.6-billion.
This was a nominal increase of R1.10 in the current agreement, which ends on March 31, and which the Constitutional Court found to be irregular and invalid in 2014.
Gordhan is against the continued use of CPS and prefers that the banks get the contract to distribute social grants to 17 million beneficiaries.
The breakthrough in the new deal is expected to be announced by Dlamini on Sunday or Monday at a media briefing in which she will face the nation for the first time to address the fiasco.
Tensions in the department worsened on Friday night with the resignation of director-general Zane Dangor in an apparent falling out with Dlamini. He resigned in the face of pressure to explain his role in the filing of Concourt papers last Tuesday.
Dangor was appointed last November after serving as Dlamini’s special adviser since 2010. It also emerged yesterday, just hours after he quit in a huff, that he and the minister had exchanged explosive messages over the weeks, in which she accused him of involvement in the filing of the court papers, which were later withdrawn at the instruction of the fuming minister.
Sassa filed new papers with the court on Thursday, The Star reported on Friday.
Sources said Dangor wanted a three-month notice period but the minister is understood to want him to leave immediately because relations are said to have broken down irretrievably.
The Sunday Independent understands that the negotiations for the new contract only started on Wednesday and caused consternation among some members of the Sassa board. It is understood Dangor had a fight with Dlamini over the issue, and was subsequently not part of the meeting.
Some members of the board are also questioning the rush to strike the deal and how crucial aspects such as the pricing could have been agreed upon in such a short time.
“The minister is using some of the board members as puppets,” said the source.
Saturday's meeting was the second between Zuma and Dlamini, after they met two weeks ago. Then, the president told the ministers and Sassa to find a solution. Dlamini on Saturday presented the details of the new deal. She argued that CPS had not received an increase in the past five years.
It was at this point that Gordhan interjected. This prompted Dlamini to hit back at Gordhan, who then called Dlamini “childish”.
Presidency spokesperson Bongani Ngqulunga confirmed yesterday’s meeting and said Zuma had called it ahead of a trip to Indonesia last night. He wanted to be assured the grants would be paid in April, and to get a progress report on the way forward.
Social Development spokesperson Lumka Oliphant said: “The minister was called to update the president on progress regarding the institutionalisation of the social grant payment system.”
Treasury spokesperson Yolisa Tyantsi declined to comment.
This came in a week when Dlamini came under siege from opposition political parties, the SA Human Rights Commission, Parliament’s standing committee on public accounts (Scopa) and her own colleagues in the cabinet over the handling of the saga.
NGO Black Sash also took to the Concourt to ask it to make sure whatever deal Sassa struck with CPS would be under direct court supervision. Its urgent court application is due to be heard on March 15.
The official opposition, the DA, has also indicated it will go to the Concourt in a bid to force Dlamini’s hand and ensure transparency in the awarding of the new contract. They will be part of the Black Sash case.
A source said on Saturday that Dlamini would argue to Treasury and to Zuma that she had negotiated the best deal with CPS. She would also take the same message to the cabinet on Tuesday, the same day she is due to appear before Scopa to answer questions.
Dangor did not answer his cellphone and messages left on e-mail, but he earlier told eNCA that his resignation was due to his disagreement with Dlamini over the legality of the CPS contract.
He told eNCA he had made efforts to talk to a range of stakeholders, including Treasury, “without CPS”. The objective was to find ways to “do this in a way that complies with the law”.
Sassa and CPS “reached an agreement” on Friday after three days of negotiations.
Scopa chairperson Themba Godi decried Dangor's departure, saying: “In our brief interactions with Dangor, he had proven himself to be an honest and hard-working civil servant. He was one of the many officials in the department and in Sassa who have been frustrated by Minister Bathabile Dlamini’s heavy-handed interference The minister must take full responsibility for this. The department is clearly falling apart.”