The operation of Cash Paymaster Services (CPS) as distributor of South African Social Security Agency (SASSA) payments will cease earlier than expected. The social development department plans to have a new services provider by November.
This was revealed by social development minister Bathabile Dlamini in Parliament, when she presented the department's R160 billion budget vote, the majority of which goes to the social assistance programme.
Dlamini told the portfolio committee on social development that the department has begun engagements with other organs of state towards phasing out the services of the current service provider.
The minister pointed out this is part of the transition towards SASSA taking over the payments function.
"We plan to phase-in the services of the new service provider by November this year. This will give us enough time to ensure a seamless transition when the current contract comes to an end in March 2018."
Change of tune
SA's social grants are distributed by CPS, a Net1 UEPS Technologies subsidiary, after the Constitutional Court (ConCourt) granted a one-year extension of the current invalid contract. The tender contract was declared invalid after it emerged irregular tendering processes were followed in awarding it.
SASSA failed to timeously find a suitable services provider and successfully facilitate the switch of payments in-house. The agency admitted it underestimated the mammoth task of taking control of social grant payments, which resulted in it coming up short with working solutions to pay social grants.
In March, the ConCourt decided to extend the contract to avert a potential social grants payments disaster. The court instructed SASSA and the social development department to use the time to find a suitable entity that will assist the agency to take over payments in the future.
While Dlamini has announced a commitment to the speedy change-over to a new services provider and transition for SASSA to take over payments, it is a change to the statements she previously made.
She has noted SASSA's intentions to distribute social grants in the near future will be attached to a R6 billion takeover process, which would take about five years to finalise.
State vs private company
Top on the list of possible candidates to take over from CPS is the South African Post Office (SAPO), which says it is ready to use Postbank to assist SASSA pay social grants.
This week, telecoms and postal services Siyabonga Cwele said with its current licence, Postbank will be able to pay social grants.
"SAPO is ready to use Postbank to assist SASSA to take over the payment of social grants as directed by the court," said Cwele.
Meanwhile, yesterday, Net1 announced its founder and chairman, Serge Belamant, will retire as CEO and director at the end of this month.
Belamant drew criticism for his comments in the media over the social grants issue, including when he reportedly said that unless government used pigeons to deliver social grants, it was only CPS that had the capacity to fulfil payments on 1 April.
In March, the Net1 board issued an apology for any comments made by CPS that were perceived offensive and arrogant with regards to the social grant payments debacle.
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