Mark Barnes: Post Bank could manage Sassa better and cheaper

2017-03-17 16:03 - Kyle Venktess and Mpho Raborife, with Bloomberg News
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SAPO CEO Mark Barnes. (Pic: Mpho Raborife, News24)

SAPO CEO Mark Barnes. (Pic: Mpho Raborife, News24)


Johannesburg - South African Post Office (Sapo) CEO, Mark Barnes told News24 that the parastatal's Post Bank could manage distribution of the South African Social Security Agency (Sassa) grants at a higher competence level and likely at a reduced cost. 

Barnes made the statement on Friday shortly after the Constitutional Court ordered that Sassa must extend Net1 UEPS Technologies' contract to distribute over 17 million grants to beneficiaries for a year to avoid a “potential catastrophe”.

“Post Bank is part of the national payment system, approved by MasterCard and Visa,” he said.

He said it would take five to seven weeks to open all the accounts. "We’ve sat down and worked out when we could have all the cards reproduced, some of them embed with biometrics,” Barnes added. 

READ: Mark Barnes denies Post Office links to Sassa grants bid

“So I wouldn’t pay for what’s in the installed base now, I’d reproduce it at a higher competence level and likely at a reduced cost,” he said. 

Barnes previously said that the parastatal was “finding it difficult to understand” why it is not tasked with distributing social grants after stating that the SAPO was ready and willing to handle distribution of the payments. 

Friday's ruling effectively ends the threat of an interruption to the welfare distribution system. However, the court did have a go at the government's handling of the program.

Social Development Minister Bathabile Dlamini will also have to explain before the end of the month why she shouldn’t pay the costs of the case in her personal capacity.

The declaration of the invalidity of the previous contract between Sassa and CPS would be suspended for 12 months, Justice Johan Froneman read from the order.

The court said it would supervise the new agreement. 

In the ruling, the court said the contract extension with Net1’s Cash Paymaster Services unit must continue on the same terms as the previous agreement that expires on March 31.

The welfare payments system was on the brink of collapse after Sassa failed to find a new company to administer the program after the court declared the original contract with Net1 illegal more than two years ago.

READ: Post Office CEO: We are ready and willing to take over Sassa payments

In 2014, the Constitutional Court declared the R10bn grant payments tender run by Net1 UEPS’ Cash Paymaster Services invalid amid irregularities in the awarding of the deal.

Subsequently, the court ordered Sassa to reissue the tender, which the state welfare agency didn't do as it said the bids were non-compliant. 

The agency said it was not ready to assume the payment function itself by April 1, as previously planned, putting the welfare project in limbo.

“That infrastructure is replicable, it’s really not fancy fabulous technology, it’s better than pigeons but it’s not irreplaceable,” Barnes said. 

“If the state can do it (make the grant payments), sending it out to private enterprises, (it) actually entrenches inequality, it doesn’t solve it,” he added.

“Anything that we can do as government, as a function that serves the people, should be done, unless we cannot do it, in which case of course we will ask someone to help us,” he said. 

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