Sassa-Sapo tiff: Treasury has to step in

National Treasury has been roped in to oversee the impasse between the South African Social Security Agency (Sassa) and the South African Post Office (Sapo) over a reliable plan to phase out incumbent Cash Paymaster Services (CPS).

Although Sassa and Sapo were ordered on Tuesday by Parliament to return to the negotiating table to reach an agreement to replace CPS in the next five months, both parties are still in a deadlock and no deal has been concluded.

Sassa and Sapo have had several meetings in which the latter’s capacity and readiness to take over social grant payments to over 17 million beneficiaries in April 2018 was discussed.

Social Development Minister Bathabile Dlamini has been accused of trying to muscle out Sapo and pave the way for an external party to be responsible for social grant payments, worth over R130 billion annually. Dlamini said Sapo doesn’t have the capacity to do it and has proposed an open tender for services Sapo couldn’t fullfi l. Sapo CEO Mark Barnes rejected her assertions, saying it has an adequate banking infrastructure to become the paymaster.

In a report-back on Wednesday to the Social Development Committee and the Standing Committee on Public Accounts in Parliament, Treasury director-general Dondo Mogajane said neither party could find each other “in terms of agreeing on the role that Sapo should pay in grants administration”.

He also dropped a bombshell, saying the Sassa and Sapo technical teams haven’t met since their negotiations began in earnest in April after the Constitutional Court’s order that extended CPS’s invalid contract until March 31, 2018. These teams are responsible for assessing the technological infrastructure and systems that would facilitate social grant payments.

Mogajane said Treasury would conduct a dispute resolution mechanism and set up an independent team to facilitate talks between Sassa and Sapo. The team will be led by Treasury and the SA Reserve Bank. The dispute resolution mechanism is expected to be concluded by Monday. The dispute resolution process will assess Sapo’s tender proposal, which Dlamini said failed to meet all requirements.

Neither party can find each other in terms of agreeing on the role Sapo should play in grants administration. Dondo Mogajane Treasury director- general