National Treasury steps in over Sassa and Sapo scrap

With five months remaining for a new service provider to be appointed for social grant payments, an impasse between both parties rages on.
Social Development Minister Bathabile Dlamini said Sapo doesn’t have the capacity to perform social grant payments and has proposed an open tender for services that Sapo couldn't fullfil. Picture: Moneyweb

The National Treasury has been roped in to oversee the impasse between the South African Social Security Agency (Sassa) and the South African Post Office (Sapo) over a reliable plan to phase out incumbent Cash Paymaster Services (CPS). 

Although Sassa and Sapo were ordered on Tuesday by Parliament to return to the negotiating table to reach an agreement to replace CPS in the next five months, both parties are still in a deadlock and no deal has been concluded.

Sassa and Sapo met over four meetings in which the latter’s capacity and readiness to take over social grant payments to more than 17-million beneficiaries come April 1 2018, was discussed.

Social Development Minister Bathabile Dlamini has been accused of trying to muscle out Sapo and pave the way for an external party to be responsible for social grant payments worth more than R130 billion annually.

Dlamini said Sapo doesn’t have the capacity to perform social grant payments and has proposed an open tender that would begin on November 3 for services that Sapo couldn’t fullfil. Sapo CEO Mark Barnes rejected Dlamini’s assertions, saying the state-owned enterprise has an adequate banking infrastructure to become the paymaster.

Sassa’s open tender process has been halted pending the Treasury’s intervention.

In a report-back on Wednesday evening to the Social Development Committee and the Standing Committee on Public Accounts in Parliament, Treasury’s Director-General Dondo Mogajane said both parties “could not find each other in terms of agreeing on the role that Sapo should pay in grants administration”.

Mogajane said Treasury would conduct a dispute resolution mechanism and set up an independent team to facilitate discussions between Sassa and Sapo. The independent team will be led by Treasury and the South African Reserve Bank. 

The dispute resolution mechanism is expected to be concluded by Monday next week and later escalated to the Inter-Ministerial Committee, chaired by President Jacob Zuma, by Tuesday.

The dispute resolution process will assess Sapo’s tender proposal, which Dlamini said failed to meet all social grant norms and requirements.

Read: The SA Post Office’s fight to pay grants

“The Treasury wants Sassa and Sapo to work together [for both state entities to collaborate on paying social grants]. Political direction is sought to resolve the dispute,” said Mogajane.

He dropped a bombshell, telling MPs that the Sassa and Sapo technical teams have not met since their negotiations began in earnest in April after the Constitutional Court’s order that extended CPS’s invalid contract until March 31 2018.

The technical teams are responsible for assessing the technological infrastructure and systems that would facilitate social grant payments. “It is worrying that the two technical teams have not met or exchanged information,” said Mogajane.

Dlamini rejected Mogajane’s claim saying the technical teams have met and the Treasury was privy to this. “They [Treasury] speak like we have not been inviting them to all technical and procurement meetings,” she said.

Dlamini appeared to not be supporting the proposed Treasury deadlock-breaking mechanism by saying she preferred Sapo’s systems to be tested for its capacity to pay social grants instead of “wasting time”. Sapo’s Barnes supported Treasury’s review of the impasse rather than solving the dispute through courts.

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How is Dlamini still employed…

uBaba Zuma -thats why. She and the ANC are the problems. But hey-the gazillions of majority voters still voted for ANC corruption. The way of Africa.

Simple, she is there to ensure that the whole process is derailed and they end up with the old pay company. That ensures that the Zupta gang are happy, commissions and kickbacks the order of the day.

End of comments.

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