16/02/2018 05:41 GMT | Updated 16/02/2018 05:43 GMT

Committee Rejects Extension Of CPS Contract

The committee on social development does not want CPS to continue distributing social grants.

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A member of the South African human rights nongovernmental organisation Black Sash holds a placard outside the South African Constitutional Court during a hearing brought forward by various organisations on the possible failure of the South African government in meeting the deadline for Social Grants payment on March 15, 2017 in Johannesburg.

The portfolio committee on social development has rejected an attempt by the South African Social Security Agency (Sassa) to extend the contract of Cash Paymaster Services (CPS) beyond April 1, when it is due to expire.

According to Business Day, acting CEO Pearl Bhengu told the committee this week that Sassa wanted the contract extended to provide "backup" in case there were problems while the contract was being handed over to the Post Office.

Sassa told the Constitutional Court earlier this month that 2.5-million Sassa beneficiaries will not get their grant payments unless the CPS contract is extended. Sassa said 2.5-million beneficiaries had not been migrated into the national payment system.

These beneficiaries reportedly need cash payments and Sassa cannot provide them by the time the CPS contract ends without CPS staying on.

But the committee's chairperson Rosemary Capa said the committee rejected this in principle.

"We rejected the concept of the contract extension... If there is an extension we need to know what specific activities will extend beyond the deadline. We would not want to see CPS continue working with Sassa post-April 1, especially on payment issues, because then it would be an extension of an extension."

Net1, CPS's parent company, filed papers in the Constitutional Court this week requesting clarity on Sassa's attempt to extend its contract, according to IOL.

Net1 chief executive Herman Kotze reportedly said the distribution of grants was a logistical "nightmare", as cash had to be distributed over large distances. While CPS was not opposed to having the contract extended, he said the company needed clarity on what exactly Sassa needed it to do.

At the same time, Sassa reportedly turned on CPS in papers filed this week, accusing the company of using its position to sell financial products to grant beneficiaries — something Black Sash and other organisations have accused it off doing for years, according to Daily Maverick.

Bengu reportedly told the court that CPS should only be allowed to continue in the transition phase of handing the grant system over to someone new.