Net1’s social grant distribution subsidiary Cash Paymaster Services (CPS) may be coy around the amount it could be remunerated underneath a new contract with all the South African Social Security Agency (Sassa). CPS told the Constitutional Court on Wednesday it would begin a completely new remuneration model.
Alfred Cockrell, the advocate for CPS, argued in the court that if you can actually contract with Sassa C to distribute social grants to 17 million recipients that has a collective worth of R11 billion C is extended come April 1, it’ll range from a rate per beneficiary model into a huge amount each month model.
Although he didn’t give further information on the single payment model can be structured, Cockrell admitted that CPS’ current rate per beneficiary grows in step with Consumer Price Inflation (CPI).
When pressed by Chief Justice Mogoeng Mogoeng concerning the exact increase that CPS has factored in, Cockrell said the grant distribution company is struggling to declare the pace.
However, in its affidavit sent to a legal court, CPS stated that to help keep the degree of its services, investments and upgrades to its infrastructure, it proposed an estimated rate of R25 per beneficiary from R16.44 whether its contract is extended for 3 months, or R22 for two years.
Under these terms, it may well pocket greater than R400 million.
CPS is here under fire recently, with critics accusing it of making the most of their state given its proposed increased rate and assertion it’s mainly truly the only company that’s got the technological opportunity to distribute social grants.
Without confirming the incidence increase, Mogoeng asked the court can authorise a completely new contract when CPS won’t disclose the purchase price it’s asking for. “You will not be doing enough to support us comprehend the matter,” he explained.?
In 2014, a legal court ruled that the social grant contract between Sassa and CPS was invalid. Sassa has repeatedly told anyone that grants are going to be paid but hasn’t given clarity regarding how grants might be distributed.
It initially revealed that it may be able to take over grant payments nevertheless stop being true.? Now human rights organisation Black Sash has urgently asked the legal court to supervise a brand new contract.? This indicates that CPS won’t adhere to the National Treasury’s tendering process as being the clock is ticking on a deal to generally be sealed before April.
David Unterhalter, advocate for Freedom Under Law, proposed a 12-month extension on the contract, adding the fact that touted 6 months was short.
CPS director Serge Belamant said he’s certain that the judge will deal with the difficulty wisely. He expects a judgement on Thursday.?Listen to Belamant inside the podcast below.
https://www.moneyweb.co.za/wp-content/uploads/2017/03/Concourt-1-edited-.mp3
The court was scathing of Social Development Minister Bathabile Dlamini on Wednesday, while it planned to know when she knew that Sassa was missing the proportions for grant payments and why the court has not been informed, suggesting “absolute incompetence”.
“I genuinely desire to understand, how did we get to that level,” Mogoeng asked. Legal court considered whether Dlamini need to be held personally liable for?paying legal costs in case, with Mogoeng describing the Sassa matter as “crisis”.
Cockrell said there was clearly an “in principle agreement” between CPS and Sassa to continue payments under a prolonged contract, but government’s ministerial task team insisted than a new contract need to be integrated. Also, he argued that unless CPS carries a new contract, it cannot get payment of R11 billion within the National Treasury to remain its “constitutional obligation” of forking over social grants.
This was underscored by Belamant, who warned that unless a conclusion over the contract is taken by the end of Thursday, it wouldn’t process payments as it needs no less than 12 days to prep for the payment of grants.
Listen to Belamant below.
https://www.moneyweb.co.za/wp-content/uploads/2017/03/Con-court-4.mp3
https://www.moneyweb.co.za/wp-content/uploads/2017/03/Concourt-2.mp3
Judgement was reserved.
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