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Johannesburg - Electronic payments company Net1 UEPS Technologies [JSE:NT1] faces the prospect of hanging onto South Africa’s R10bn social grants tender until 2017.
This is after the state-owned South African Social Security Agency (SASSA) dismissed three new bids for the contract.
In April 2014, the Constitutional Court ordered SASSA to reissue the tender, which involves dispersing electronic payments to over 10 million grant recipients. The court’s Justice Johan Froneman at the time criticised SASSA for its “irregular” conduct regarding awarding the contract to Net1 division Cash Paymaster Services (CPS).
SASSA subsequently opened up the tender to bidders with a court instruction to award a new contract in October 2015.
Yet Net1 now faces the prospect of hanging onto the tender until 2017 after SASSA rejected the three new bids for the contract.
“The bids were evaluated and adjudicated on time to meet the October deadline of the court,” Kgomoco Diseko, SASSA’s senior manager for media relations, told Fin24 via email.
“The tender has however not been awarded, and SASSA subsequently gave the Concourt its account of the situation, given the fact that the bids were non-responsive in mandatory administrative functionality which is a key consideration in evaluating a tender,” he said.
Diseko further explained to Fin24 that SASSA “fully complied with the court order to the extent that if the tender is not awarded the invalidity declaration of the contract will be suspended till the end of the current contract period which expires in 2017”.
This means that Net1 is set to continue carrying out the tender until the expiration period.
Net1, earlier this year, announced that it didn’t plan to take part in the new round of re-applying for the tender, meaning that there is expected to be a new tender provider, at least in 2017.
In a market update early on Friday, Net1 further said that a recommendation from the Bid Adjudication Committee (BAC) asked for the “tender not be awarded as a result of the non-responsiveness of all the bids received with the mandatory requirements contained in the RFP (request for proposals)”.
“Accordingly, the BAC recommended that the CEO (SASSA’s Virginia Petersen) should allow the current contract with the company (Net1) to continue until completion of the five-year period for which the contract was initially awarded (March 31, 2017), in accordance with the court’s judgment of April 2014,” added Net1.
“The BAC also recommended that the CEO should file a report with the court within 14 days of the decision not to award the tender, setting out all the relevant information on whether and when SASSA will be ready to assume the duty to pay grants itself,” said Net1.
