South Africa, Politics

SASSA’s deafening silence on April 1 readiness for monthly R10-billion grant handover

By Marianne Thamm 17 January 2017

With only two months to go before the contract with Cash Paymaster Services (CPS), which distributes a monthly R10-billion worth of vital social grants to 17-million South Africans, expires on March 31, the Department of Social Development has not made any public announcement on the South African Social Security Agency’s proposed April 1 takeover. Instead, Minister Bathabile Dlamini’s spokesperson, Lumka Oliphant, has been hogging headlines for an expletive-ridden Facebook post in defence of her minister. Meanwhile, on Friday January 13, SASSA quietly hosted a “request for information” briefing in Pretoria where interested parties were rushed through a presentation. By MARIANNE THAMM.

The invitation to “service providers for social grants payment and banking services” to bid for the SASSA national tender was advertised on the National Treasury website on December 9, 2016 with the closing date listed as February 10, 2017. The deadline for any questions on these pressing matters of national importance by those who attended is Tuesday, January 17 – only two working days after the compulsory briefing session on January 13.

December 9 coincidentally just happened to be the same date Minister Dlamini and her Deputy, Hendrietta Bogopane-Zulu, kicked off a series of “dialogues” with social grant beneficiaries in Mangaung, Free State, and Madibogo village in North West.

And the topic of these dialogues? What the department was doing to make sure people would still be paid and that cards would still be functional on April 1?


Both the Minister and Deputy Minister will utilise this opportunity to interact directly with social grant beneficiaries and caution them to be more careful when using their social grant income. They will also be educated about some of the social grant related issues as the festive season begins. Citizens will be urged to spend wisely during the festive season and plan for the new year,” according to the Department’s website.

On Friday, January 13, about 150 people, including management companies, banks and those able to offer biometric services, crowded into the SASSA head office in Pretoria and were taken through a rushed presentation for what has to be one of the most significant functions of government, the disbursement of social grants to 17-million of the country’s most vulnerable citizens who depend of them for survival.

Among those who attended was South African Post Office (PO) CEO, Mark Barnes, who has consistently maintained that the PO, through Post Bank, is perfectly placed to deliver the service. Barnes was among the bidders for the tender that was issued in 2014 and which was later aborted. Barnes is still convinced that the PO should successfully bid for the tender.

Democratic Alliance Shadow Minister for Social Development, Lindy Wilson, who along with her colleague Bridget Masangu have been at the forefront of challenging SASSA’s readiness for the takeover, told Daily Maverick that participants at the briefing were not allowed time to ask questions after a “rushed” presentation. Instead they were asked to submit them all by today (January 17).

Considering that the controversial and illegally awarded tender to CPS – which has already been extended – comes to an end on March 31, it is highly unlikely that any of the interested parties who attended the January 13 session will be able to make a successful bid.

Was it just a smokescreen?

Wilson believes it was.

I can say with absolute clarity and without fear of being contradicted that CPS has already been contracted to continue with the disbursement of grants. There is no way anyone else will be able to do this,” she said.

In November last year, after two abysmal presentations by officials – one to Parliament’s Standing Committee on Public Accounts – Serge Belamant, CEO of Net 1 UEPS, which controls CPS, told Business Day that he had not been given any indication of what government intended to do when the contract came to an end in March this year.

I assume they have some sort of plan to take over on April 1, but we have no indication of what it is,” Belamant is reported to have said.

However, earlier that same month, on November 3, Belamant had informed Net 1 UEPS Technologies shareholders that “SASSA has asked us to propose a plan that would allow for all currently issued SASSA cards to continue to operate for a further 24 months after April 1, 2017”.

This, he said, had required CPS to update all cards with new MasterCard and Net 1 cryptographic key sets, and expiry date, as the current expiry date is set to March 31, 2017.

If these updates are not performed by April 1, 2017, these cards would no longer be operational in terms of the EMV standard and banking regulations. Next one has designed a plan that would allow such updates to take place at SASSA offices, Net 1 base points and Net 1 ATM. Contingency plans have also been put in place to ensure that grant distribution will not be affected after April 1, 2017 or during the SASSA insourcing or transition period. Net 1 continues to work with SASSA to achieve the objectives without any impact to beneficiaries and awaits SASSA’s decision to proceed according to the proposed plans.”

Belamont added that “any SASSA business continuity is welcomed by Net 1 if under favourable terms and conditions”.

Instead of taking the public into their confidence, however, the Minister of Social Development, the department and SASSA have inexplicably dodged questions and missed deadlines set by the Constitutional Court, which ruled the CPS tender illegal in 2013. Officials also failed to attend a crucial presentation to Parliament’s portfolio committee.

At the November 30 committee meeting Minister Dlamini refused to disclose the department’s contingency plans, curiously stating that doing so would place these “at risk”.

At this presentation to the committee, Zane Dangor, newly appointed Director-General of the Department of Social Development, admitted, after questions by committee members, that because almost all of the timelines for deliverables that had been set out by the Constitutional Court had not been met by the department or SASSA, the supervisory mandate had now reverted to the Constitutional Court.

Dangor said SASSA needed to urgently “go back” to the Constitutional Court to discuss options.

What I would like to know at this stage is, has the Constitutional Court been informed of the department and SASSA’s current plans,” Wilson told Daily Maverick.

Even more disturbing is an amaBhungane investigation published by Daily Maverick that revealed that Belamant had originally used “a thinly veiled black front to win a R10-billion South African Social Security Agency (Sassa) contract”.

Journalist Craig McKune, after an in-depth investigation, found that Belamant had dumped his BEE partners and had used irregularly derived Sassa funds to sign on and pay off a businessman, Brian Mosehla, who regularly hangs out with Lunga Ncwana, a close friend of social development minister Bathabile Dlamini.

It was former SASSA chief executive, Virginia Peterson, who in January 2012 wrote to Minister Dlamini recommending that CPS win the tender. McKune found that Petersen had ignored several red flags with regard to CPS’s claim that “black partners” would “manage/execute 74.57% of the contract value”.

Shortly afterwards the losing bidder, AllPay, took the matter to the Constitutional Court saying the tender had been irregular and should be set aside. In 2013 the ConCourt did just that.

In a follow-up ruling in 2014 the ConCourt ruled that SASSA should put out a new tender. Three bids were received, including one from the Post Office, but officials decided none of these met requirements. The CPS tender was then extended until March 31, 2017.

CPS has been distributing government grants for more than 15 years, originally only in a few provinces. In 2005, an investigation revealed that CPS’s then BEE partner had paid for renovations to former Minister of Social Development Zola Skweyiya’s home.

It is Lunga Ncwana, wrote McKune, who advised Dlamini on whom to appoint to key committees deciding on CPS’s future with SASSA.

It is against this murky backdrop that the current fiasco of SASSA’s “taking over” the payments of social grants must be viewed. There appear to be many vested interests in CPS continuing the tender, which is now illegal.

Wilson is determined to keep the issue alive and has vowed to compile a comprehensive list of key questions to SASSA and the department with regard to how the agency will handle the distribution of grants, and more.

From the presentation last week it appears SASSA wants to issue a card that is exclusively a grant card and not a bank card. Grant recipients will not be able to make deposits. The current cards, which are underwritten by Grindrod Bank, function as a bank card. Also, SASSA wants to compartmentalise various functions. How much more is this going to add to the cost? There are still far too many questions that need to be asked, including who exactly it was that drew up the request for information presentation,” said Wilson. DM

Photo: Minister of Social Development Bathabile Dlamini during the official opening of the Disability Rights Summit held at Saint Georges Hotel in Centurion, 10 March 2016. (Photo: GCIS)


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