Top court clears path for CPS to continue distributing social grants

Cash Paymaster Services’ (CPS) bid to continue distributing social grants got a major boost when the Constitutional Court ruled it was eligible to tender for any Department of Social Development contracts. The ruling was made on Friday after CPS’s interlocutory application in the court on February 7 asking it to explain the March 17, 2017 judgment declaring its contract with Sassa “illegal and invalid”. The court then ordered Sassa to advertise for a new service provider. But this did not mean CPS should be excluded from any tenders to distribute social grants, the court said on Friday. “In view of the fact that CPS’s eligibility to take part in future tender processes was not an issue in the application in which judgment was handed down by this court on March 17, 2017, the judgment did not purport to deal with that issue.”

In its order, the Constitutional Court said: “It is declared that the applicant, Cash Paymaster Services, is not prohibited by the court’s judgment and order of March 17, 2017 from participating in the tender for the provision of cash payment services or social assistance of (Sassa) South African Social Security Agency.” Yesterday, CPS CEO Herman Kotze was elated at the court’s judgment. He said he had lodged the application because of the “misinterpretation” of the court’s March 17, 2017 judgment. There were a section of people in social security agency circles who had interpreted that judgment to mean that the company was barred from participating in any tenders offered by the Department of Social Development, he added.

“In the middle of January, Sassa advertised a tender asking for a service provider to distribute cash payments to social grant beneficiaries. “It was on that basis that we approached the Constitutional Court to get clarification on whether we could submit our bid,” Kotze said. He said the court had given the company the green light to submit its bid before the closing date on March 7. According to Kotze, the tender is to carry out cash payments to social grant beneficiaries at 10 000 pay points in mostly rural areas of South Africa where people do not have access to ATMs. He said most of the 2.9 million recipients received old age pensions. The South African Post Office (Sapo), which was to distribute social grants from April 1, has decided not to oppose Sassa’s application for the CPS contract to be extended for six months.

On February 8, Sassa asked the Constitutional Court to extend CPS’s contract on the grounds that it has all the necessary facilities to distribute cash payments to rural communities. Initially, Sapo had opposed the application, but Sapo CEO Mark Barnes has since rescinded that decision. In his affidavit submitted in the court on February 19, Barnes said it was a misunderstanding between the parties involved in the matter.