Is another Sassa crisis coming?

Ray Mahlaka

The suspension of the tender process by the SA Social Security Agency (Sassa) to find a new service provider for cash payments to 2.5 million elderly and disabled beneficiaries has raised fears of a sequel to the social grants crisis.

Sassa has five months to replace Cash Paymaster Services (CPS), whose contract to administer cash payments was extended in March for another six months by the Constitutional Court.

The remaining beneficiaries access social grants through Post Office (Sapo) outlets, bank ATMs or retail points.

The delays in replacing CPS are haunting Sassa again, which might jeopardise grant beneficiaries’ livelihoods.

Social Development Minister Susan Shabangu has suspended the tender process in which service providers can submit competitive bids for the cash payment of social grants.

In court papers, she said the bid evaluation committee doesn’t have technical knowledge and expertise to evaluate proposals.

She requires more time to appoint “individuals with knowledge and expertise”.

It’s not the first time Sassa’s bid evaluation committee has halted progress. Sapo, which took over a large portion of social grant payments from CPS in April 2018, was initially disqualified for not having the full capacity to administer social grants.

However, Parliament concluded the committee’s technical assessment of Sapo’s capacity was flawed and it qualified to fully participate in Sassa’s tender.

Shabangu said the Sassa tender specifications need to be revisited as they don’t provide accurate technical information bidders need to provide proper costing models.

This was after prospective bidder G4S Cash Solutions complained that its tender documentation didn’t provide bidders with accurate information on the number of beneficiaries per pay point.

The lack of accurate information would benefit CPS, as it already has data on the number of cash beneficiaries and pay points. This might pave the way for CPS to submit a bid to still be part of the Sassa payment network beyond September 2018.

The Black Sash has sounded the alarm, saying the decision to suspend the tender process weeks after CPS’s contract was extended is “drastic”.

Moneyweb

Towards the end of 2015 it had become obvious that the Cambist platform, which offered 19.5% returns, had just about collapsed. A High Court judgment declaring a number of emolument attachment orders (EAOs) unlawful and invalid had effectively torpedoed the business model.

Cambist relied on EAOs as it sold debt contracts on its platform backed by these orders, which ensured monthly repayments. Once these orders became unenforceable, however, payments dried up and those left holding the contracts had no way to recover what they’d paid for them.

However, months before this judgment Cambist had been in