Not only will April grants be paid late‚ according to Cash Paymaster Services (CPS) if there is no contract in place on Wednesday‚ but it has also said the Post Office will charge more than it does.
CPS claims‚ based on its experience of paying grants for five years‚ that it takes 12 working days for the process and‚ therefore‚ the contract must be in place on Wednesday for payment to happen on April 1.
It warned the South African Social Security Agency (Sassa) that grants would be late in a court reply to the SA Post Office who had told the Constitutional Court it could pay the 17 million grants to 11 million people.
The Post Office in its court papers said it had bankers in its management team that could help guide it to pay grants and that it had a wide footprint of branches across country.
It suggested it would be ready to pay grants within three to six months. It stated ” there is technically no need to extend the incumbent’s [CPS’s] contract beyond its expiry date of 31 March“.
CPS said if the Constitutional Court was happy with the Post Office proposal‚ it would be happy to step down from its obligation to carry on paying the grants.
But its CEO Serge Belamant claims in court documents that CPS services will be cheaper than the Post Office.
Belamant said‚ “I wish to highlight one aspect of SA Post office proposal‚ its price“.
The post office price of R20 per beneficiary would increase the cost to Sassa‚ compared with the CPS contract‚ by between R668 million and R1.99 billion over the two-year period‚ he said.
The Post Office quote also doesn’t include the cost of re-registering all beneficiaries‚ replacing their cards and the cost of a call centre.
The cost of replacing 12 million beneficiary cards is estimated at R200 million and the cost of a call centre is about R6 million annually and it will cost R1 billion to re-register all beneficiaries‚ which Belamant says the Post Office has not factored in.
If you add up these costs the Post Office costs will be even higher‚ Belamant argued.
Appearing before parliament on Tuesday‚ Social Development Minister Bathabile Dlamini said there was no crisis and that grants would be paid on time. She also repeatedly told MPs the Post Office could not pay the grants.
Director of Centre for Applied Legal Services Bonita Meyersfeld was angered by Belamant’s letter to the Constitutional Court.
She said CPS were pushing the court to agree to its conditions for the interim contract with Sassa‚ by threatening that they wouldn’t pay on time. She said this was an “unacceptable negotiation tactic“. — Tiso Black Star Group/Katharine Child