Scopa roasts Dlamini Black Sash to pressure court on grants
MPs demand answers on US firm’s grant tender
MPS on parliament’s Scopa committee have demanded that Social Development Minister Bathabile Dlamini explain why a white-owned company was contracted to make social grant payments in the wake of President Jacob Zuma’s call for radical economic transformation in his Sona address.
Dlamini was summoned to appear before the Standing Committee on Public Accounts yesterday to explain how her department found itself in what committee chairman Themba Godi called “this emergency”.
Dlamini – who arrived late for the meeting and raised further ire by wanting to leave early to attend a cabinet meeting before MPs could question her – butted heads with opposition MPs, who said she was dodging the issue.
However, she told MPs that the grants issue was “very important” and she didn’t want “South Africans thinking that I am arrogant”.
She also made several reassurances that grants would be paid on time when the current contract with Cash Paymaster Services (CPS) comes to an end at the end of this month.
However, MPs across party lines were concerned that the 11th-hour renegotiation of the contract with CPS did not address the company’s BEE status, especially in light of her own comments to the committee that she wanted the grant money to “go where the people are” and ensure that grant money went to developing communities rather than just to “big retailers” where it was currently spent.
IFP MP Mkhuleko Hlengwa asked whether the company was BEE compliant, given that it was “a whiteowned, American-owned” company while the EFF’s Mbuyiseni Ndlozi said “CPS is not BEE compliant, so why are you in negotiations with them if you believe in radical economic transformation?”
He said black people were relegated to doing “gardens and small deals”.
ANC MP Nyami Booi also questioned who the BEE partners were and said Zuma had focused his Sona address on radical economic transformation.
“These guys are getting richer than us [South Africans] and they may be a private company but it is government revenue that is assisting them.”
Dlamini, however, sidestepped the question, saying all matters of CPS’s BEE compliance had been dealt with in the Constitutional Court.
She also sidestepped questions about what the new CPS contract would cost, saying negotiations were still under way.
Officials from her department and the South African Social Security Agency (Sassa) met for three days of negotiations last week. While talks have been completed, a deal has not yet been signed. Dlamini said the current cost stood at R16.44 per grant, for a total of 11 million payments.
There are currently about 17 million recipients but Dlamini explained that in some instances more than one grant was paid into one account, bringing the total number of payments to 11 million. — TMG THE Constitutional Court will be asked by Black Sash to return to its oversight role in the troubled deal between Minister Bathabile Dlamini’s Social Development Department and Cash Paymaster Services (CPS), which is owned by global parent company Net 1 UEPS Technologies.
Black Sash trust advocacy manager Elroy Paulus said they would be back in the ConCourt on March 15 to argue that “given the situation Sassa has created, the ConCourt should compel Sassa and CPS to enter into a contract on terms designed to protect grant beneficiaries”.
Speaking to the Dispatch, Paulus said they were most concerned about CPS and Net1 offering a suite of ancillary business services to grant holders, such as selling them airtime, electricity, insurance and loans, which were paid by deductions from grants before they were paid out.
These concerns were set out in their papers before the ConCourt, he said. “A grant cannot be ceded and they started to get people to sign up and then money was taken from their grant,” he said.
In 2012 Sassa contracted CPS to pay social grants on its behalf, but the contract was declared invalid by the Constitutional Court in 2013.
However, the order of invalidity was suspended in April 2014 and Sassa filed a report with the Constitutional Court on November 5 2015, stating that it would not award a new contract, but instead intended to take over the payment of social grants from 1 April 2017, when the suspension of invalidity lapsed.
The ConCourt then let go of its supervisory role.
Paulus said: “Sassa is not able to take over the payment of social grants on April 1 2017. Sassa now intends to enter into a further contract with CPS to continue this function for an unspecified period.
“The Minister of Finance [Pravin Gordhan] has stated that an extended, or new, contract with CPS would be unlawful and uncompetitive, contrary to the requirements of section 217 of the constitution, and would constitute a deviation from prescribed procurement procedures. The minister has stated that he will not sanction such deviation unless the ConCourt agrees to this request.
“Sassa announced that it would approach the ConCourt for its approval of the proposal. The agency subsequently withdrew its application.
‘On February 22 2017, the minister of social development and Sassa informed parliament that Sassa would not make any application to the ConCourt.
“It would merely report to this court, at an unspecified time before 31 March 2017, on what it had done.
“The Black Sash has made an urgent application for direct access, in the public interest and in the interests of all grant beneficiaries, most of whom are unable to litigate themselves.”
The Black Sash has been working on the Hands Off Our Grants (HOOG) campaign since 2013. — mikel@dispatch.