Sassa to meet CPS over grants payment
The South African Social Security Agency (Sassa) has scheduled a meeting with Cash Paymaster Services (CPS) for Wednesday to discuss the payment of social grants after March 31.
The Treasury, which is unhappy about the costs of distributing the grants, is expected to participate in the meeting.
Three days have been set aside for the negotiations, which will coincide with the distribution of the last grants in terms of the contract Sassa awarded to CPS in 2012.
On Tuesday, ahead of the critical meeting, Sassa is due to appear before the parliamentary standing committee on public accounts. In November 2016, Sassa was subjected to an intense grilling by Scopa, which was looking into R1.1bn in irregular spending by the agency.
News of the meeting between CPS and Sassa was contained in a Sens announcement issued on Friday by CPS’s holding company, Net1 UEPS, which is listed on the JSE and on the Nasdaq in the US.
In terms of listing requirements, Net1 is obliged to disclose information on any developments that would affect the company’s share price.
Meanwhile, Mark Barnes, CEO of the South African Post Office, would not comment on media reports that he had been approached by Sassa CEO Thokozani Magwaza to consider options for assisting with the distribution of social grants after April 1.
On Friday evening, Barnes would only say that it was not appropriate to reveal who the Post Office was talking to about the Sassa contract. “We’re talking to a lot of people,” he said.
The Post Office has confirmed it has responded to a request for information Sassa issued in December.
The request is the key initial step in issuing a tender.
The reported approach by
Magwaza to the Post Office comes against the backdrop of growing tensions between the CEO and Social Development Minister Bathabile Dlamini.
The minister is understood to be determined for CPS to continue to distribute social grants after the March 31 deadline. She told a parliamentary portfolio committee on Wednesday that the only feasible option was for Sassa to continue using CPS for two more years.
Despite the intervention of the Constitutional Court, which declared the CPS contract invalid and unlawful in 2013, the department and Sassa have failed to ensure that a new contract be in place before the expiry of the current contract.
The Net1 share price did not react on Friday, but the share price has been trending upwards since October 2016, when it became apparent that Sassa had little option but to continue using CPS to distribute grants for at least another year.
“The company reiterates its commitment to assist social grant recipients, Sassa and the South African government within the ambit of all relevant laws and regulations,” said Net1.
It said it could not predict the outcome of the meeting.
Net1 CEO Serge Belamant has said many times that CPS will only consider a new contract and will not entertain an extension of the current contract, which the Constitutional Court declared invalid.