The invalid Cash Payment Services (CPS) contract may be extended for a further six months if the South African Social Security Agency’s (Sassa) gets its way — yet the Constitutional Court ruled that the contract is to end on March 31.
The extension is contained in the latest Sassa report to the Constitutional Court, filed less than a month ago, and does little to allay fears that millions of beneficiaries will face another payment crisis created by the agency.
This time last year Sassa claimed that the only way to ensure that grants are paid would be to extend the invalid CPS contract.
This was followed by a year of discussions between the South African Post Office (Sapo) and Sassa, guided by Parliament, the Constitutional Court and an interministerial committee.
After the Constitutional Court declared in 2013 that the contract for the provision of social grants was unlawful, the parties have been back to court several times about how Sassa structures a new deal for the smooth transition from the CPS contract, which was extended for another year in April 2017.
The latest push for another extension coincided with the service agreement signed between the Post Office and Sassa on December 8. The agreement was seen as a breakthrough, which would finally see the back of CPS and the emergence of a new service provider.
But the need to distribute cash to grant recipients still keeps the door open for CPS.
Sassa’s report states that the Constitutional Court will be approached to extend the invalid contract once again while the Post Office contract is being phased in. The treasury will also be asked to approve a deviation for six months.
Sassa’s spokesperson Tshediso Mahlaku confirmed the agency had requested the Constitutional Court to grant the extension and that they would only approach treasury once that request had been granted.
“For purposes of advertising the cash payment contract, Sassa followed normal procurement processes. This does not require any approval from treasury,” he said.
Treasury said it was not involved in the new contract Sassa had advertised and the agency had not requested a deviation for the extension of the CPS contract.
Even if the Constitutional Court does not agree to another extension of the invalid contract and treasury doesn’t agree to a deviation, CPS may still get a cut of the social grants deal. A tender to pay cash to beneficiaries at distribution points has been advertised and is open to everyone, including CPS.
The Post Office is due to take over the grant payment system for the next five years. But the agreement is short on detail about how all payment channels would be merged with the Post Office. This raised alarm bells for Black Sash’s national director, Lynette Maart, who is concerned about the disbursement of grants using cash-in-transit vans.
“It’s [the contract] not clear if Sapo or another service provider will provide the vans. This may affect over two million beneficiaries and, without a clear indication, we may be sitting with the same problem that landed us here,” she said.
But tender or not, Sassa wants CPS. The agency says its primary approach is to ensure that a new cash payment service provider is appointed, which will include a continued role for CPS for at least six more months.
“The transition process will cover the phasing out of CPS and the phasing in of Sapo for electronic payments and a new service provider for the cash payment,” reads the report.
“To this extent, a formal application for the suspension of declaration of invalidity and subsequent extension of the contract with CPS will be lodged with the Constitutional Court.”
In December, Sassa advertised the tender for a new cash-payment service provider. The cost was not disclosed. The closing date is January 19. The tender description in the Government Gazette is light on details but the Mail & Guardian understands that the successful bidder will be required to have the necessary infrastructure, equipment and technology as well as pay-point management skills, its own security and the ability to communicate with beneficiaries.
According to the Sassa report to the Constitutional Court, the bidder should have security and mobile ATMs or payment machines, load money, provide payment cards and ensure both an online and an offline service — all the services offered by CPS.
CPS said it may bid, depending on the commercial viability and the attractiveness of the terms.