Grant payments to continue despite court ruling - Dlamini

Wednesday, August 29, 2012

Cape Town - South Africa's over 10.6 million social grant beneficiaries can be assured that grant payments will continue despite yesterday's ruling by the North Gauteng High Court which declared invalid a tender award for grant payments, the Minister of Social Development Bathabile Dlamini says.

Judge Elias Marojane's ruling on Tuesday found that there had been irregularities in the supply chain management processes and he declared invalid the awarding of the R10 billion tender.

In a briefing to media on Wednesday, Dlamini noted that despite this, the judgement did not stipulate that the tender be set aside or that any corruption was involved in the awarding of the contract.

"We agree with the court that the continued service to citizens is of paramount importance," she said, pointing out that grant payments would not be disrupted by the ruling.

Tuesday's ruling follows the awarding on January 17 of the tender by the South African Social Security Security Agency (Sassa) for a social grants payments system to Cash Paymaster Service.

The tender involved the rolling out of a new and more secure card backed by a biometric system, which came into operation in June.

The department will now review its supply chain processes and an advisory committee will also be set up to look at the possibility of having Sassa pay out grants directly to beneficiaries, without the need to channel these through a third party.

Dlamini said delegations had visited India, Brazil and Australia to look at how grant payments were made there.

She said the current social grants tender would run for five years, until 2017. Thereafter it is hoped that grant payments would be made directly to beneficiaries by Sassa.

Turning to the adjudication of the tender itself, Dlamini said the scores of the competing bidder were lowered after a final presentation made by bidders, because of the financial costs entailed in the company's bid.

Commenting about the issues raising by the complainant, AllPay, around the impartiality of members of bid committees, she said the department had checked any conflict of interest of those serving in the two committees.

"When there were allegations of some who had connections with certain companies, we did a check on our own... and also some of them offered that they could be investigated. But also we asked them to write affidavits, because we had to make a follow-up.

"Also, before the process even started, State Security checked all the people who were serving on all the committees," she said.

Commenting about the awarding of the tender, Sassa chief executive Virginia Petersen said the competing bidder had indicated in a presentation of the bid committee that it would not be able to present its full service from April 1.

"When the presentation was held, in fact the company [AllPay] said it would not be ready to implement a solution because they were still doing research and development for their solution.

"While the tender specified a required start of April 1, they offered a date towards the end of the year," she said, adding that a late introduction of a new solution would mean less savings for the government.

Turning to other issues around social grants, Dlamini said the department was concerned about illegal deductions being made by micro-lenders or loan sharks from beneficiaries' grant payments.

She said Sassa had been working closely with the Financial Services Board, the National Credit Regulator, crime intelligence, the National Treasury and the SA Reserve Bank to tackle this issue and that 10 arrests had been made and hundreds of bank cards, pension cards and identify documents seized.

The implementation in June of a new biometric system for paying social grants, has involved the verification of millions of beneficiaries and this has helped uncover fraudulent beneficiaries and alleged corrupt officials.

So far, the department has cancelled 13 911 grants which resulted in an initial saving of R800 million.

A number of Sassa officials had been arrested and were in various stages of the legal process.

Sassa's automated intelligence system has revealed that 482 beneficiaries are receiving grants payments outside the borders.

The department has also detected a number of beneficiaries that are not registered on the Department of Home Affairs' population register.

"This and duplicated biometrics on the Sassa payroll is currently under investigation to track patterns of potential fraud," she said.

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