CPS, Sassa agree to new grants contract

• The Treasury must first agree to terms • Agency head on sick leave, acting CEO appointed

Net1 UEPS subsidiary Cash Paymaster Services (CPS) and the South African Social Security Agency (Sassa) have agreed to the terms of a new two-year contract that Net1 CEO Serge Belamant says is “fantastically good for Sassa”.

Before a new contract can be finalised, the terms have to be agreed to by the Treasury.

Belamant would not provide details but said the fee charged each month for each of the approximately 11-million recipients would be considerably below the R25 mentioned in the media.

“The increase we asked for was based purely on CPI [consumer price index] increases over the past five years, it will also incorporate all the work Sassa wants us to do to enable them to take over the contract.”

The five-year contract that expires at the end of March provided for a fee of R16.44 per transaction. Belamant would not comment on media reports that the new fee had been set at R17.64. Sassa’s programme head Zodwa Mvulane also said she could not comment on the R17.64 figure but did stress that the fee applied to the 11-million grant recipients and not the 17million beneficiaries.

“You may have a granny who receives her pension as well as two child grants, that’s considered one transaction,” she said.

Dondo Mogajane, deputy director-general at the Treasury, said on Sunday his department could not comment.

He said the Treasury had wanted to participate in the negotiations between Sassa and CPS. “But if we had we could have been in contravention of the Constitutional Court,” Mogajane said. In 2014 the court ruled that the current Sassa contract, awarded in 2012, was invalid. It subsequently suspended the invalidity until the end-March 2017 expiry of the contract.

There’s considerable uncertainty about whether the court has jurisdiction over a new contract between Sassa and CPS.

In a move some say was designed to ensure the court would continue to have jurisdiction R25 per recipient was ‘considerably’ above the fee that CPS said it would charge per person, said Net1 CEO Serge Belamant the former director-general of the Department of Social Development, Zane Dangor, instructed Sassa CEO Thokozani Magwaza to apply to the court for approval for a new contract with CPS.

But within hours of filing last Tuesday Magwaza went on sick leave and Minister of Social Development Bathabile Dlamini appointed an acting CEO in his place. The acting CEO, Vuyelwa

Nhlapo, withdrew the application and replaced it with a report. The report makes clear Sassa is merely informing the court of its plans in the interests of transparency.

“Sassa has been advised that, because it has been discharged from this court’s supervisory jurisdiction, it is no longer obliged to report to this court,” Nhlapo said in the report.

But in a further twist it has emerged Sassa has to get the approval of the other parties cited in the application before it can withdraw it and so may have to account to the court after all. Hinting at the strained relations between Dangor and Magwaza on the one hand and Dlamini on the other, Nhlapo said the application had been filed without the minister’s authorisation. This was refuted by government officials backing Dangor, who said the decision to go to court had been taken in a meeting, which included Dlamini’s advisers.

On Sunday, Dlamini refused to answer questions on Dangor’s recent resignation.