Banks evaluating social grants tender
SA’s major banks are evaluating whether or not to tender for the government’s multibillionrand social grant contract, which has been mired in controversy and has tight delivery deadlines.
Some of the top local banks are evaluating whether to tender for the state’s multibillion-rand social grants contract, which has been mired in controversy and has tight delivery deadlines.
South African Social Security Agency (Sassa) officials will appear on Wednesday before Parliament’s portfolio committee on social development to give a status update.
First National Bank attended a briefing session held at the Sassa head office in Pretoria on January 13, a spokeswoman said. “We are in the process of reviewing the [request for information] requirements.
“The bank is not in a position to provide further details on the matter,” she said.
A Nedbank representative said: “We can confirm we have received the [request for information] for the Sassa tender and, like all other tenders, we are evaluating it.”
Capitec, a major player in the low-income and mass markets, said it would not bid.
“Capitec has never pursued a Sassa contract,” spokesman Charl Nel said.
Although potentially lucrative, the Sassa contract — which sees R141bn paid annually to 17million poverty-stricken South Africans — has been steeped in maladministration.
Billed in 2012 to be worth R10bn, the contract was won that year by JSE-listed Net1 UEPS, which owns the company that distributes the grants, Cash Paymaster Services (CPS).
In 2013, after a court challenge from losing bidder Absa, the Constitutional Court found that the tender was invalid and in 2014 ordered that the tender process be repeated.
A 2015 tender process, in which neither CPS nor Absa bid, was scrapped by the Department of Social Development.
Standard Bank, which was one of three bidders that had unsuccessfully bid for the contract in 2015, said it was not at this stage engaging with anyone around Sassa payments.
In late 2016, as it emerged Sassa was not prepared to take over the Net1 contract, which expires at the end of March, the agency and the department were hauled before Parliament to provide an update on their planning. It remains unclear and, considering that a new bidder would take months to prepare a distribution system, it is widely believed Net1 may hold on to the contract for a while longer.
The department, which reports to Social Development Minister Bathabile Dlamini, has previously said the Net1 contract would be extended if need be.
Postbank, which hopes to win more government business, is a keen contender for the contract. Postbank MD Shaheen Adam has said it could use the Post Office’s distribution network to expand its services.
Barclays Africa did not respond to a request for comment.
IT IS WIDELY BELIEVED NET1 MAY HOLD ON TO THE CONTRACT FOR A WHILE LONGER