Serge Belamant, the CEO of Net1 UEPS, which controls Cash Paymaster Services (CPS) — the company that distributes social grants — said he had not been given any indication of what the government intended to do when his company’s five-year contract expired at the end of March 2017.
Belamant confirmed that his company was prepared to assist the South African Social Security Agency (Sassa) with the transition, which he expected would take 18 to 24 months.
"I assume they have some sort of plan to take over on April 1, but we have no indication of what it is," said Belamant.
The agency is understood to be in talks with the Reserve Bank, the Treasury and various banks about the monthly distribution of R10bn of social grants to 21-million beneficiaries across the country.
Sassa spokesman Kgomoco Diseko would not shed any light on what progress had been made with plans for Sassa to take over the distribution from CPS.
However, he did say that Social Development Minister Bathabile Dlamini would "make an announcement soon".
Mark Barnes, the CEO of the South African Post Office, which was among the bidders for the tender issued and then aborted in 2014, confirmed on Monday that the Post Office — through Postbank — had "every intention of tabling a comprehensive proposal for taking over the payment of the social grants".
He said the Post Office was the best qualified to take over the payments.
Barnes may have government policy on his side given the views expressed in the recently released National Integrated ICT Policy White Paper. Among the suggestions for maximising the value of Postbank infrastructure is the recommendation that the mandate of Postbank over the medium to long term should include "payment of social and government grants".
Belamant said his 18-to 24-month figure was based on CPS’s own experience of issuing 10-million Sassa cards. "I don’t think anyone could do it better or faster than we did."
He said if Sassa was planning to revert to the cash payments in use when CPS took over in 1999 the transition would be easier.
Belamant said the current tender was not worthwhile for his company. "We’ve been doing it for five years and over that period we received no compensation for inflation or the weakening rand."
In October 2015, faced with legal challenges from Net1 UEPS, Sassa abandoned plans to issue a new tender as required by the Constitutional Court. Instead, it said, it would bring the contract in-house.
Sassa can extend the CPS contract twice for 12 months at a time while it prepares to take it in-house. Belamant said CPS would expect better terms if it were going to assist Sassa during that transition period.
Sassa’s problems are not limited to preparing for grant distribution after March 2017. On Wednesday, it is due to appear before the standing committee on public accounts to explain why its irregular expenditure shot up to more than R1bn in 2015-16 from just R93m in 2014-15.
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