News / South Africa

Ilse de Lange
2 minute read
23 Mar 2018
2:00 pm

CPS ordered to repay R317m to Sassa to benefit the poor

Ilse de Lange

Two decisions taken by Sassa in favour of the controversial service provider have been found to be unlawful.

The High Court in Pretoria has ordered Cash Paymaster Services (CPS) to pay back over R317 million to the South African Social Services Agency (Sassa)” for the benefit of those for whom it was intended in the first place”.

Judge Moroa Tsoka on Friday ruled in favour of Corruption Watch (CR) that Sassa’s decision in 2012 to vary its contract with CPS about the costs of reregistering South Africa’s social grant beneficiaries and Sassa CEO Virginia Pepterson’s 2014 decision to pay CPA an additional R317 million had been unlawful.

The variation resulted in the cost of reregistration rising from the initially agreed all-inclusive cost of R16.55 per beneficiary to R23.20 per reregistration.

CPS was in addition ordered to pay interest on the amount dating back to June 2014 and to pay the legal costs of the application.

Sassa initially vigorously defended its position, but withdrew its opposition to the application early last year.

Sassa in 2012 enlisted CPS to distribute social welfare grants on its behalf, but the Constitutional Court in November 2013 set aside the award of the tender as unlawful and in 2014 ordered Sassa to initiate a new tender process. To date no new tender has been awarded.

Judge Tsoka found that Sassa’s Bid Adjudication Committee did not authorise the variation agreement and that the approval in 2014 after the services had already been rendered made it unlawful.

CPS maintained there was nothing sinister about the variation of the contract as its initial price was based on reregistering over 9 million adult beneficiaries, but did not make provision for the reregistration of some 12 million children, but the judge said the parties never actually agreed on a suitable price, children were included in the term beneficiaries and the process was screwed in favour of CPS.

“It was unfair, inevitable, opaque, anti-competitive and, probably, not cost-effective.

“…As a result of Sassa’s unlawful conduct, the fiscus has been robbed of a substantial amount of money intended for the most vulnerable and poor people in our country. The fiscus is poorer as it did not receive fair value for what it paid.

“It is just and equitable that the payment of R316 447 361.41 made by Sassa to CPS, together with interest, be returned to the fiscus for the benefit of those for whom it was intended in the first place,” he said.