28/02/2017 13:04 SAST | Updated 28/02/2017 13:15 SAST

Sassa Still Hasn't Solved Social Grants Problem, But Thinks It Will Negotiate A New — Very Expensive — Contract

Sassa won't ask the Concourt for an extension on the CPS contract. Instead it will negotiate a new one.

Gallo Images / Thapelo Maphakela
Minister of Social Development Bathabile Dlamini. Her department still hasn't set in place a solution for delivering social grants after the current contract expires at the end of March.

The South African Social Security Agency says it will not approach the Constitutional Court to ask for an extension on their illegal contract with CPS, but will rather negotiate a new one.

Sassa project lead Zodwa Mvulane faced a grilling from the standing committee on public accounts on Tuesday over its readiness to take over the 17.335 million social grants paid out.

Former forensic investigator and DA MP Timothy Brauteseth led the charge, asking Mvulane which one of the two options facing them they would take.

"Sassa faces a fork in the road: you've got the court option and you've got the contract extension option. Which one are you taking?" Brauteseth asked.

Mvulane told the committee that Sassa wouldn't be asking for an extension.

It would rather file a "supplementary report", with full disclosure to the court that they would negotiate a brand new contract with CPS.

'Rock and a hard place'

Brauteseth said Sassa faced a problem, as Treasury had said it would not support Sassa in extending a contract with CPS.

"You are between a rock and a hard place. Treasury will not support you. What is the plan?" he said.

Mvulane said that Treasury's stance was based on their impression that Sassa would be extending the illegal contract.

The new contract would have new terms, and there were provisions in the Public Finance Management Act for emergency procurement, which they were sure Treasury would support, Mvulane said.

"I hope you're right," Brauteseth said.

He asked Mvulane what portion of the blame Sassa deserved in the crisis. She said only 50 percent, as they have been relying on late work streams to finish advising them.

"Who appointed the work streams?" he asked. "We did," she answered.

"So Sassa is actually 100 percent to blame," he remarked.

50% rise in costs?

The new rate at which CPS would negotiate the terms could rise between 30 percent and 50 percent, and was therefore beyond the budget, Brauteseth said.

The current rate CPS charges is R16.44 per recipient. Their new rate, its CEO had bragged at a public meeting, could be between R22-R25, Brauteseth said.

Sassa's 2018 budget is R2.6 billion, but the new rates will put costs at R3 billion to R3.4 billion.

MPs registered their concern.

Inkatha Freedom Party MP Mkuleko Hlengwa said the country and Sassa were on the eve of a crisis, and he wanted to register his concern at the proposed new contract with CPS.

Economic Freedom Fighter MP Ntombovuyo Mente said she was not buying the need to go with CPS. She said people had complained about money being deducted from their grants under CPS.

The meeting continued on Tuesday.