Treasury wildcard backed in fresh Sassa, CPS talks

A task team of ministers has decided that talks between the South African Social Security Agency (Sassa) and Cash Paymaster Services (CPS) must be started afresh, and only once National Treasury has agreed to entertain talks with a single bidder.

This has emerged from court papers filed by Sassa in response to an application by Freedom Under Law, the second rights group to petition the Constitutional Court over the welfare grants crisis.

Sassa disclosed the task team ordered it to prepare a request to Treasury to allow a deviation from normal public finance rules that would legitimise 11th hour negotiations with CPS.

The drafting of the request will be overseen by senior advocate Wim Trengove and be submitted at the instruction of Social Development Minister Bathabile Dlamini, according to Wiseman Magasela, who served as acting CEO of Sassa last week.

The task team comprises Dlamini, Finance Minister Pravin Gordhan, Minister in the Presidency Jeff Radebe and the ministers of state security, telecommunications, home affairs and science and technology.

Magasela confirmed in the submission to the court that Sassa and CPS had, in three days of talks earlier this month, agreed in principle to a new two-year contract to allow the Net1 subsidiary to continue disbursing more than 17 million pensions and welfare grants every month.

But the ministerial task team “decided that fresh negotiations with CPS should start only if and when the National Treasury gave its prior written approval for a deviation”.

Dlamini and Gordhan have disagreed in recent weeks as to who should take over grant payments after March 31, when the current contract with CPS expires.

Dlamini maintains that CPS is the only sound option and that she would expect Gordhan to make an exception to the rules and approve the contract, though no other company was allowed to bid.

Treasury has indicated it could not, and Dlamini’s critics have accused her of engineering a crisis that puts at risk the poor to force the embattled finance minister into a corner. – ANA