CPS ‘in the dark’ over grant payment plans
• CEO says social security agency has not asked for help • Company will consider new contract
Serge Belamant, CEO of Net1UEPS whose subsidiary Cash Paymaster Services (CPS) is at the centre of the social grant distribution debacle, said on Wednesday, the South African Social Security Agency (Sassa) had not yet formally approached them about distributing grants after March 31.
“At this point, we’re stopping on 31 March. It’s not complicated, we don’t have the R10bn that has to be distributed but I’m sure they’re [Sassa] going to do something within the next few weeks,” he said.
Belamant said he was surprised by reports that Sassa intended approaching the Constitutional Court for guidance on the way forward.
Sassa told a parliamentary hearing last week it would apply to the court on Wednesday, February 8. However, that date was subsequently pushed out to February 15.
Last week, opposition parties expressed concern that CPS would have the contract extended to its own advantage, seeing that the department was in a desperate position and needed to distribute the grants.
It is unclear whether Sassa, in a bid to ensure grants are paid on April 1, intends to ask the court for authority to extend the CPS contract or issue a new contract to CPS.
In April 2015 the court, which months earlier had declared the CPS contract invalid, ruled that Sassa had to issue a new tender for the contract.
The court assumed a supervisory role over that process.
However, on Wednesday, Belamant said he did not understand why Sassa was going to the court.
He said he doubted the Constitutional Court would be interested in getting involved.
“And what do they intend asking for? Permission to extend a contract the court declared invalid?”
Belamant said a new contract would make more sense. “But do they need to go to the court to approve that? What is needed is a new procurement tender.”
Given the urgency of the situation and the fact that a new
tender would take at least several months to complete, Belamant said Sassa would have to approach the Treasury, as it had the power to allow a government entity to enter into a contract in an emergency situation.
“Of course, it can’t be an emergency out of their own doing [as is claimed by the DA], but a new tender can’t be awarded to someone who is unable to perform it.”
Belamant said he was not interested in extending the existing contract, but would look at a new contract. “We will have a list and will certainly be very firm about what will be in the new contract,” he said.
He said he was particularly keen that Sassa ensures there are no legal challenges to any new contract.
Corruption Watch presents the most serious of the legal challenges facing Net1-UEPS. The non-profit organisation has asked the high court to set aside a R275m payment made by Sassa to Net1-UEPS after the Constitutional Court ruled that the original contract was irregular and invalid.
Belamant said they had filed their heads of argument and Corruption Watch was now trying to get a court date.
Anxious grant recipients may have to wait until next Wednesday, February 15, for some clarity on the chaotic situation.
The Treasury and the Reserve Bank, who are regarded as the key role players, are scheduled to attend a meeting of the social development portfolio committee on their role, position and readiness in the implementation of the institutionalisation of the social grant payment.
Sassa did not respond to requests for comment.
Cash payments: Net1-UEPS CEO Serge Belamant says he would consider a new contract to pay grants.