Losing bidders challenge Sassa in court over R10bn grant tender
Five years of fraught tender procedures have culminated in the awarding of a social-grants payment contract worth more than R10-billion to a foreign-owned company with a chequered history in South Africa, the Mail & Guardian reports. The high-stakes award has sparked a legal battle led by two losing bidders.
Absa bank's AllPay claims that the award was "irregular" and has demanded that it be set aside, while Empilweni Payout Services has asked the courts to order the release of all tender documents and records for scrutiny. Cash Paymaster Services, who won the bid, has held provincial contracts to pay social grants in Limpopo, KwaZulu-Natal, the Eastern Cape, Northern Cape and North West for 12 years. Over this period, AllPay and Empilweni have provided the same service in the Free State, Western Cape, parts of the Eastern Cape, Gauteng and Mpumalanga.
Sassa has now contracted Cash Paymaster, wholly owned by the South African-based but United States-listed multinational Net1 UEPS, to pay grants in all nine provinces. The national contract issued in January by the South African Social Security Agency (Sassa), entails enrolling about 15-million grant recipients, issuing them with smart cards, using biometric tools such as fingerprinting to prove their identities and paying them. While the tender award is a major blow to AllPay and Empilweni, who claimed it "threatens to completely destroy" its business, the victorious Cash Paymaster, awarded stocks and $3.6-million in juicy bonuses to its executives.
In its 12 years of activity, Cash Paymaster has courted controversy. In 2009 the Mail & Guardian reported that Cash Paymaster's Limpopo BEE partner, Northern Corporate Investment Holdings, was central to serious corruption allegations against then premier Ngoako Ramatlhodi. In 2008, City Press alleged that Thuthukile Skweyiya, the wife of then-social development minister Zola Skweyiya, was in business with ANC stalwart Mazwi Yako, who was another of Cash Paymaster's BEE partners, allegations she denied. In a Supreme Court of Appeal ruling on Cash Paymaster's challenge to a Sassa decision to distribute some grants through the South African Post Office, Justice Zukisa Tshiqi said: "One is, unfortunately, left with a lingering impression that [Cash] Paymaster's motive in wanting to have the letter agreement set aside is to perpetuate the expensive cash payment system ..." AllPay's application is due to be heard next week.
Read the full article on http://mg.co.za.
