Treasury dismayed by Gordhan vs Dlamini Sassa war story

Cape Town – National Treasury said it is dismayed by a report in The Star on Wednesday that suggested there was a “war looming” between Minister of Finance Pravin Gordhan and Minister of Social Development Bathabile Dlamini over the social welfare payment system.

The context and the headline, titled “It's Gordhan vs Dlamini over R120bn grant contract” is “glaringly misleading”, National Treasury said in a statement on Wednesday.

The Star had in its possession a letter Gordhan had written to Dlamini on February 1, in which he said the Cash Paymaster Services “should not be part of the service providers to be considered for the distribution of social grants to 17 million recipients from April 1”.

Bloomberg, who also had the letter, said Gordhan had warned Dlamini that her plan to extend a contract with a unit of Net 1 UEPS Technologies would be “unlawful”.

FULL STORY: Gordhan says extending Net 1 welfare deal is unlawful

Responding to the media reports, National Treasury said its involvement in the matter of the payment of grants beyond the March 31 2017 was at the behest of the Department of Social Department and the South Africa Social Security Agency (Sassa).

Treasury said Dlamini has sole and primary responsibility for the function of paying social grants and that Sassa must take a final decision on the matter.

“National Treasury explored and analysed the pros and cons of a range of payment options and provided expert inputs in areas of procurement, public finance, financial sector policy, banking and other related matters,” it said.

“However, it is up to Sassa as to which option to choose taking into account all relevant facts, laws and regulations. This includes the relevant decision of the courts in the same matter.

“National Treasury is happy that the Department of Social Development has committed to seek the view of the Constitutional Court insofar as the option it prefers is concerned on which the court has previously made a determination.

“National Treasury stands ready to assist the Department of Social Development and Sassa by any legal means possible to achieve the goal of paying grants to deserving South Africans relying on such grants.”

Gordhan's letter, which The Star published excerpts from, said:

“I am informed that the Sassa team and, in particular, the chief executive have argued for option 1 and 2 to be implemented as it is perceived this may be the only solution under the current circumstances.

“However, if this route is taken, it will certainly expose government to legal challenges. Our only interest at this stage is to help Sassa, and yourself, to ensure that social grants are paid out on April 1, 2017."

Earlier, South African Post Office (SAPO) CEO Mark Barnes also criticiced the report, as it linked him to the bid for the social grant payment tender.

Barnes said that “SAPO has had numerous recent approaches from several parties, expressing interest in providing support services, be they of a technical, banking or logistics nature”.

“SAPO took the decision to submit the RFI independently. Neither SAPO nor I have any form of understanding nor agreement with any party whatsoever in relation to Sassa grants,” he said.

SAPO said it did not approach either CPS or Net1 in relation to Sassa grants.