Panel slams Post Office over grants

THE high-level panel set up to resolve the social grants crisis has slammed the SA Post Office as “opportunistic” for planning to double the costs of paying grants.

The current social grant distributor, Cash Paymaster Services (CPS), is paid R1.8 billion a year but the Post Office’s projected costs are R2.8bn in the first year, which will increase to R3.7bn in the fifth year.

“The panel believes these proposed price increases are opportunistic and made possible by the lack of competing bids. These prices, if agreed, would result in an additional R2bn of annual operating costs to the SA Social Security Agency (Sassa) by year five,” warned the panel.

“If other potential service providers making greater use of the National Payment System (NPS) were able to submit proposals, then the Post Office’s proposal would be deemed uncompetitive,” the panel added.

The Payments Association of SA has also told the panel that cheaper alternatives than CPS exist.

The NPS, which is run by the Reserve Bank, provides an inter-bank settlement service though a real-time electronic settlement system.

The panel of experts includes Auditor-General Kimi Makwetu, ANC stalwart Mavuso Msimang, ex-Reserve Bank governor Gill Marcus, Tim Masela, Heinz Weilert, Angela Bester, Werner Krull, Doris Tshepe, Mmamolatelo Mathekga, Anthony Felet and Barend Taute.

It is monitoring Sassa’s implementation of the takeover of social grants payments from CPS and submits quarterly reports on the progress.

The panel also told the Constitutional Court that Sassa does not need the R960 million it has requested from the National Treasury.

Sassa has asked for R960m to fund the phasing out of CPS as the social grants distributor to two million beneficiaries who are paid in cash.

But the panel, which was set up by the country’s highest court, said instead of demanding more money, Sassa could even make savings.