Concourt extends CPS contract with Sassa by 6 months
THE CONSTITUTIONAL Court has cleared the way for controversial social grants payer Cash Paymaster Services (CPS) to ask for more money from the National Treasury for its service to the SA Social Security Development Agency (Sassa).
This after the apex court on Friday extended the current unlawful contract between Sassa and CPS – due to expire on March 31 – for a further six months. It also said CPS may, in writing, request the National Treasury during the period to investigate and make a recommendation regarding the price to be paid for the service it is to render.
CPS could use this clause to try to recoup its losses after the high court in Pretoria last week ordered CPS to pay back almost R317 million to Sassa. The money related to the registration and payment of grant beneficiaries.
Judge Moroa Tsoka ruled that Sassa’s decision to pay R316 447 361.41 to CPS for the services was unlawful.
“This judgment reinforces the immense importance of procurement processes as a bulwark against corruption and maladministration,” said Corruption Watch executive director David Lewis.
Meanwhile, the Concourt declared on Friday that for the six months from April 1, Sassa and CPS were under a constitutional obligation to ensure payment of social grants to about 2.8 million beneficiaries who are paid in cash. The invalidity of the contract between CPS and Sassa, relating to cash payment of social grants to beneficiaries paid in cash, was further suspended for six months, effective April 1.
On the cost of CPS’s service to Sassa, the Concourt said the National Treasury would be required to file a report with the Concourt within 21 days of receipt of the CPS request setting out its recommendation.
Black Sash national advocacy manager Hoodah Abrahams-Fayker said: “Our position as Black Sash is that CPS must not make any profit. The extension of the contract must happen on the same terms and conditions without any increase in fees. Look, the Concourt was in a corner. They would not have granted the extension if they had other options.”
CPS parent company Net1’s chief executive, Herman Kotzé, said they were relieved the Concourt had provided guidance for the grants payment after March 31. “We understand the critical importance of uninterrupted service delivery to the country’s most vulnerable citizens and we will continue to provide the same reliable service in accordance with our track record over the last six years,” said Kotzé.
In a media statement yesterday, Sassa said that the judgment made it possible for CPS to continue paying grants on a cash basis to beneficiaries until September.