Three ma­jor banks eye Sassa job

The Star Early Edition - - COMPANIES - Re­nee Bonorchis

THREE of South Africa’s big­gest banks are con­sid­er­ing bid­ding to dis­trib­ute gov­ern­ment wel­fare pay­ments to more than 17 mil­lion peo­ple as a con­tract with a unit of Net1 UEPS Tech­nolo­gies comes to an end af­ter years of le­gal bat­tles.

The ex­ist­ing con­tract earned Net1 about R2 bil­lion a year, its an­nual re­ports show. Bar­clays Africa Group, Ned­bank Group and a unit of FirstRand are con­tem­plat­ing bids, ac­cord­ing to e-mailed re­sponses to ques­tions from the Johannesburg-based lenders.

The state-owned Post Of­fice has al­ready said it will bid.

While it is yet to is­sue a for­mal bid, the South African So­cial Se­cu­rity Agency (Sassa) has asked po­ten­tial bid­ders to sub­mit re­quests for in­for­ma­tion as it mulls how to dis­trib­ute R139.5bn of wel­fare pay­ments a year.

Ruled in­valid

The cur­rent con­tract with Net1 unit, Cash Pay­mas­ter Ser­vices, ex­pires at the end of March, but may be ex­tended un­til Sassa’s own sys­tems are in place or an al­ter­na­tive provider is found, ac­cord­ing to the So­cial De­vel­op­ment Depart­ment.

While CPS’s con­tract was ruled in­valid by the Con­sti­tu­tional Court in 2013, it con­tin­ued, be­cause Sassa did not is­sue a new re­quest for pro­pos­als and there were un­re­solved le­gal dis­putes.

“The gov­ern­ment deals come with a lot of costs,” said David Shapiro, deputy chair­man of Sas­fin Securities in Johannesburg.

“I imag­ine there will be a num­ber of bid­ders. It’s too big a con­tract to dis­re­gard.”

African Bank and Capitec Bank Hold­ings said they are not bid­ding, while Stan­dard Bank Group said it has not en­gaged in the Sassa process to date. – Bloomberg

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