SASSA progress with SAPO: hearing with Ministers

Public Accounts (SCOPA)

31 October 2017
Chairperson: Mr T Godi (APC) and Ms R Capa (ANC)
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Meeting Summary

The meeting was an engagement between the Standing Committee on Public Accounts (SCOPA), the Portfolio Committee on Social Development, the Department of Social Development (DSD), the South African Social Security Agency (SASSA), the South African Post Office (SAPO) and National Treasury to deal with the appointment of the service provider to pay SASSA grants from 1 April 2018.

The Committee said it needed a demonstration from the Department of Social Development and from SASSA that they were, indeed, taking active measures to comply with the terms of the judgement of the Constitutional Court.

The Minister of Social Development informed the Committee stated that there had been an engagement with Post Office and it had not responded suitably to the offer by SASSA to engage the Post Office in one of the four areas of work required for payment of grants. The report she had received was that SAPO was sticking to the July 2017 letter sent to SAPO by former SASSA CEO Magwaza. When questioned, Minister Dlamini stated that it was true that there was no agreement between SASSA and the Post Office since the SCOPA meeting on 24 October. She said SASSA was not fighting SAPO. SASSA had sent letters asking for the service providers that SAPO was going to use and SASSA had not received a response. Perhaps SASSA would receive a response now.

The Minister of Telecommunications and Postal Services indicated that he did not see this process as procurement. The letters from SASSA had indicated that the approach from SASSA was based on an inter-governmental agreement. There seemed to be a dispute of facts and he had hoped that there would be an opportunity at government level to deal with the dispute. He had been told that several meetings had been held to try and resolve the matter but they had not succeeded.

The SAPO Board Chairperson said SAPO had previously paid social grants so there was no question as to whether it could do it. The Post Office had already been tested. Secondly, SAPO had received a letter in July from the former SASSA CEO, after advice from National Treasury, and that letter had appointed SAPO as the provider of social grants in collaboration with SASSA. Thereafter, SASSA had assessed SAPO in terms of the CSIR Report and from what they had seen, SAPO was more than 90% successful in the criteria against which they were measured. In the view of SAPO, it was ready to do what it had been asked to do.

The SAPO CEO said that when entities engaged in inter-governmental processes, they built an asset for the state, as opposed to when the function was outsourced to the private sector. As government entities, they could be monitored and could put into effect the wishes of government for a social service. Any monies transferred to SAPO stayed with the state. Certain services would be outsourced by both bodies, such as the transit of cash, but then the entities would benefit from economies of scale. He said the primary focus of SAPO was its banking services. The Post Bank was a designated service provider in the National Payments System, performing its own interbank transaction clearing and could provide all grant recipients with full interoperable access to all ATMs, retailers and POS purchases. PostBank was sponsored by Standard Bank, although it had recently applied for its own banking licence. The Post Office had attained a 97% approval by CSIR in the evaluation criteria and that the remaining criteria had either been incorrectly evaluated, or were invalid. Yet SASSA had determined that the process of paying social grants should be divided into four areas and had awarded SAPO only one of those areas, which excluded banking services.

A key issue that came to light in the meeting was that the SASSA Acting CEO believed that the process was a procurement process driven by the rules of the open tender process and that she was unable to move from the decision taken by the SASSA Bid Committee. SAPO and Minster Cwele said that the process should be open to negotiation as this was collaboration between two government entities based on the Intergovernmental Relations Framework Act which set out specific procedures for intergovernmental collaboration.

In an attempt to break the deadlock, Members suggested that the Inter-Ministerial Committee, headed by the President, might be the mechanism to break the deadlock. Members expressed frustration that they were exactly in the same place as a year ago. Members said one could see efforts to collapse the process so that the current provider, Cash Paymaster Services, could continue. Some Members requested a parliamentary inquiry into the matter. The request was supported but the timeframe was problematic as Parliament would shortly go into an extended recess and the current contract came to an end on 31 March 2018.

Ultimately, the Co-Chairpersons requested that the SASSA and SAPO CEOs, with their teams, and guided and directed by their political heads, had to meet that afternoon and the following day, and report back the following evening on a way forward. The Ministers agreed to this and National Treasury who was requested to participate in the meeting, stated it would be prepared to observe.

Meeting report

Mr T Godi (APC), SCOPA Chairperson, stated that this was an engagement between the Standing Committee on Public Accounts (SCOPA), the Portfolio Committee on Social Development, the Department of Social Development (DSD), the South African Social Security Agency (SASSA), the South African Post Office (SAPO) and National Treasury to deal with the matter of the appointment of the service provider to pay SASSA grants as from 1 April 2018. The meeting would be co-chaired by Mr Godi from SCOPA and Ms Capa from the Portfolio Committee on Social Development. The role players had to reach finality. The situation could not continue as it was.

Co-Chairperson Godi told the Minister of Social Development that the meeting should have taken place the previous week but it seemed that the situation had changed since then. SCOPA had anticipated that certain things would have been done by 31 August 2017. The SAPO was to have attended a SCOPA meeting in September but, at that stage, there was nothing that SAPO could tell SCOPA as the necessary processes had not been completed. The Chairperson stated that the matter had to come to a close and SASSA could not kick the can down the road until 31 March the following year. The Committee needed a demonstration from the Department and from SASSA that they were, indeed, taking active measures to comply with the terms of the judgement of the Constitutional Court. If there is not a way forward and the Committee is not going to hear how it is going to happen, they should all go back to their offices as Members did not have time to waste. He did not wish to engage in meaningless talk.

He would ask the Minister of Social Development to speak, followed by the Minister of Telecommunications, the SAPO CEO, and then the Treasury Director General. The Committee wanted the insights of Treasury, which would certainly have been interested in the tender process, especially due to the scale of money involved in the process. National Treasury would be able to give advice and guidance to the Committee.

Minister of Social Development presentation
Minister of Social Development, Bathabile Dlamini, informed the Committee that the officials had presented a report the previous week. She would speak about the feedback on the procurement of a payment service provider, i.e. South African Post Office; the phase-in phase-out plan; progress insourcing certain payment functions, risk and mitigation plan, and business continuity/way forward.

Co-Chairperson Godi asked whether it was the same presentation as the previous week as it appeared to be. If it was different, the Members of the Committee did not have copies. If it were the same document, he did not think that it was necessary to go through that document again.

The Minister responded that the Committee should ask questions and she and her team would respond as they did not know where to start from and could not be told to speak but not to say what had been prepared.

The Chairperson said that the officials should have done their job on 24 October when they made the report. He had been expecting the Minister to report on developments since the 24 October and to report on the engagement with SAPO.

The Minister stated that there had been an engagement with Post Office and the report that she had received, stated that SAPO was sticking to the letter sent to the SAPO CEO by the former SASSA CEO.

The Chairperson summarised the situation. There had been no agreement between SASSA and the Post Office since the Committee had engaged with SASSA on 24 October.

Minister Dlamini stated that it was true. SASSA had gone through a procurement process, after which they should have met with SAPO but the Post Office had asked for a postponement. A letter was sent to SASSA by the SAPO CEO and on the date of the meeting to discuss the award, the SAPO officials said that they stood by the letter written by SASSA to the SAPO CEO. SASSA had clarified areas where there were shortcomings as well as the strengths of the Post Office. SASSA was not fighting SAPO. SASSA had been stressing the issue of SAPO but after that response by the Post Office, letters had been sent by SASSA asking for the service providers that SAPO was going to use and SASSA had not received a response. Maybe SASSA would receive a response on who the service providers were at that meeting.

The Chairperson said that he had suggested that after the SASSA presentation, SAPO be asked to present. However, the Minister had informed the Committee that there was no agreement with the Post Office. There had been a meeting between SASSA and SAPO but there was no agreement. Nevertheless, he would give SAPO an opportunity.

South African Post Office presentation
Minister of Telecommunications and Postal Services, Siyabonga Cwele, indicated that he would be brief because Ministers were not allowed to deal with procurement – that was dealt with by the CEO as the Accounting Officer. As Minister, he had to oversee the entity but he could only say what he had been told by the SAPO. With him in the meeting were the SAPO Board Chairman and the management of SAPO. The advice that he had received was that the project owner was SASSA and DSD, and SAPO was a willing organ of state willing to help another organ of state. He was cautious about the procurement thing. He did not see the process as procurement. The letters indicated that there had been an approach from SASSA based on an inter-governmental agreement and, of course, SAPO had provided information to the project owner. There seemed to be a dispute of facts and he had hoped that there would be an opportunity at government level to deal with the dispute but now they were being called to account. He had been told that several meetings had been held to try and resolve the matter but they had not succeeded.

The Minister stated that the dispute of facts was not a new thing. In 2003, SAPO was providing partial grant payment services. In 2009 SAPO was granted permission to register beneficiaries but there was a dispute by one of the service providers over the registration of new grant recipients which had led to a court case. The fact was that towards the end of August, a letter was received which was regarded as an appointment from SASSA, with several requirements to be met. The letter had followed earlier discussions with SASSA, including workshops, held with an intention of resolving issues with SASSA. He had been hoping that the officials would have resolved the matter. He had provided the information as background context but he was hoping that, as organs of state, the matter would be finalised as soon as possible. He and the Minister of Social Development served on the Inter-Ministerial Committee which tried to deal with such issues and gave guidance but they had not taken the matter to that forum.

SAPO Board Chairperson, Mr Comfort Ngidi, said he would give a brief introduction and then ask the SAPO CEO to make a presentation. As was well known, SAPO had previously paid social grants so there was no question as to whether SAPO could do it or not. The Post Office had already been tested. Secondly, SAPO had received a letter from the former SASSA CEO, after advice from National Treasury, and that letter had appointed SAPO. Thereafter, SASSA had assessed SAPO in terms of the CSIR Report and from what they had seen, SAPO was more than 90% successful in the criteria against which they were measured. In the view of SAPO, it was ready to do what it had been asked to do. The CEO would deal with the specifics. For example, did one need a banking licence to pay social grants? The answer was clearly in the negative.

Mr Mark Barnes, SAPO CEO, thanked the Committee for the opportunity to provide the position of SAPO. The purpose of the presentation was to provide clarity on some of the issues where ambiguity had set in. In his presentation, he noted all the dates on which there had been meetings and engagements. Any number of the engagements had preceded the former SASSA CEO’s letter to SAPO, so it was not an unguarded process that he had engaged in when he had written the letter.

The CEO spoke to the possibility of SAPO as being a solution aggregator. The primary reason that SAPO wanted to be involved in the processing of beneficiaries for SASSA was to share knowledge and capabilities as government entities and to avoid duplication of investments. When the entities engaged in inter-governmental processes, they built an asset for the state, as opposed to when the function was outsourced to the private sector, and a dependency on that service provider was created. As government entities, they could be monitored and could put into effect the wishes of government for a social service that it wished to provide. Contracts could easily be transferred back to SASSA. Any monies transferred to SAPO stayed with the state. Certain services would be outsourced by both bodies, such as the transit of cash, but then the entities would benefit from economies of scale.

The primary focus of SAPO was its banking services and its particular capabilities in that context had been set out for SASSA. The Post Bank was a separate and autonomous component in SAPO and financial transactions were strictly segregated. It was a designated service provider in the National Payments System, performing its own interbank transaction clearing and could provide all grant recipients including full interoperable access to all ATMs, retailers and POS purchases. A banking licence was not a requirement to pay social grants. PostBank already had the necessary regulatory approvals and capabilities to effect grant disbursements. PostBank was a full member of the Payments Association of South Africa and the South African Banking Risk Information Centre, as well as a full member of VISA and MasterCard. It had applied to the Reserve Bank for registration as a bank on 26 June 2017. PostBank had 5.7 million customer accounts, deposits of R5 billion, and R8 billion invested in Treasury or money market investments. It was the highest capitalised bank in Africa and had been around for 142 years.

There were misconceptions about the services of SAPO. It was able to settle banking clearances as they worked through Standard Bank. All of the Post Office counters were considered ATMs. SAPO did not need to register as a merchant, despite being disqualified on the point of not being a registered merchant. SAPO had proposed staggered payment by paying on birthdays, but they would be willing to pay whenever SASSA so required.

The CEO had downloaded the CSIR Due Diligence Report received by SASSA six weeks previously, but not shared with SAPO. Of the 218 criteria in the report, only eight had not been met. That gave SAPO a 97% pass rate. Of those 8, SAPO would contest six, and two criteria were not applicable. SAPO could produce bank cards at a rate of 2 million every three weeks. There was a contract about the process but it was confidential.

In principle, SAPO could provide 2 500 points of distribution of payment. For payment in deep rural areas, the entity would probably have to use cash-in-transit companies, in particular for security reasons.

Essentially SASSA had asked SAPO to develop a system. SASSA wanted SAPO to develop a system but wanted someone else to deliver banking services. SAPO believed that it was capable of managing the banking services. PostBank had a net value of R3 billion. It had sufficient funds for branch capacitation with sufficient staff, whom they would train. SASSA had costed all expenses required to upgrade. It planned to hand the service back to SASSA in five years’ time.

There were significant differences in using a state entity. Interest would be earned and there would be free ATM withdrawals. Interest on undrawn balances had never accrued in the past and that had significant relevance.

SAPO considered that they had a legally binding contract. SASSA was offering to appoint SAPO to provide the system only but SAPO could not accept such an appointment that excluded its core capabilities as an integrated banking service. SAPO would be willing to collaborate with the SASSA Project Manager and to find a solution.

Mr V Smith (ANC) proposed that the Director General of National Treasury be asked to speak. As Minister Cwele had said, the Executive had no role to play in procurement. That was the role of the officials. The Committee had heard from SASSA the previous week and from SAPO at this meeting giving totally contradictory arguments. National Treasury was the appropriate department to call in the bid evaluation and the bid adjudication teams to clarify some of the issues. He wanted to hear the views of National Treasury as that would lead to a more productive meeting.

National Treasury presentation
Mr Dondo Mogajane, Director General of National Treasury, stated that the responsibility of procurement was that of the Accounting Officer, but National Treasury was interested in the case of SASSA because of the magnitude of the costs. Treasury would ensure that procurement processes were above board and that there was value for money. R200 million per month was spent on the grant administration by SASSA but National Treasury felt that the money spent on rendering the service should be zero. Treasury had engaged with the previous CEO and did not have a problem with SAPO as there had been a court judgement in 2010/11 allowing SAPO to play in the space. National Treasury had initially suggested a hybrid approach which would mean the involvement of all banks. The hybrid approach would allow for service providers to take trucks to rural areas to pay beneficiaries there and beneficiaries should be allowed to go to any ATM or pay point. Once the process of payment had been diversified, there would be value for money. However, Treasury had no objections to SAPO managing the process if that was a viable option.

SASSA had asked National Treasury for deviation to engage with SAPO, which had been granted to ensure that National Treasury was not delaying the process. That was in July 2017. The key issue was CSIR and how CSIR came into the picture because due diligence was a key process that Treasury was looking at. The process was a SASSA process. Deciding who should be on the Bid Committee was a SASSA decision, and they had not invited National Treasury, but Treasury was willing to grant a deviation if required to do so. National Treasury was worried as grants should be paid and but there should also be attempts to save R170 million to R200 million spent each month on administrative processes. If SAPO could do those two things, it should be looked at very closely. If that could be done through another open bid process, National Treasury would be happy.

The DG believed that there had to be a process at Ministerial level through the Inter-Ministerial Committee as that would close the loop and ensure that everyone would find each other. National Treasury stood ready to get involved. If SASSA saw it fit for National Treasury to oversee the process, they would. National Treasury was usually invited to be involved as observers in bid processes involving large sums of money. If Treasury could be involved as an observer, it could be assured that the process was above board.

There was some discussion between the Co-Chairpersons as to the process to be followed, but Mr Smith had been on the floor and had said he would speak after Treasury.

Mr Smith was grateful for the input by the National Treasury DG. There was clearly a deadlock. SAPO had said that it could produce cards and was playing in the banking space. The previous week SASSA had stated that SAPO had neither capabilities.

If there was a deadlock, what was the deadlock breaking mechanism? If the Committee did not insist on a deadlock breaking mechanism, and a year down the line, there was a duplication of payments and unnecessary expenditure, then Parliament would have failed in its oversight function. The Members could not say that they were not aware of the situation as, in that very meeting, they had been made aware. If there was fruitless and unauthorised expenditure, Parliament would have failed. Parliament could not fail because officials failed to see each other. What was the deadlock breaking mechanism? Ultimately, the Inter-Ministerial Committee had to get involved in the process. What the Committee was doing was a means to an end and the end process was that South Africans had to receive their grants.

Minister Dlamini stated that SASSA needed to respond to the SAPO presentation. Some of the things that the Post Office was talking about, had not been in its response to SASSA and the agency had not been able to anticipate that SAPO would be able to do some of the things.

Mr M Booi (ANC) rose on a point of order. He informed the Minister that the Committee was done with the process. The Committee had heard from the officials and the expectation had been that they would work on those things. The instruction to SASSA had been to tell the Committee what they had done. The Committee had heard from SAPO and the only thing that Members were interested in, was what was going to be done by SASSA.

Co-Chairperson Capa protected him from the Minister.

On a point of order, Mr Brauteseth (DA) said that the Committee had deviated from the procedure agreed upon and he believed that there was going to be a suppression of questions.

Co-Chairperson Capa said that she would not allow a situation where the Minister of Social Development would not have a chance to speak in response to SAPO’s input but, firstly, Members wanted to interact with the input.

On a point of order, Ms N Khunou (ANC) stated all of the members were boiling and wanted to speak. She said that in the last meeting, Members had agreed that the Committee would write a letter to Minister of Social Development, the Minister of Telecommunications and Postal Services, as well as to Inter-Ministerial Committee Chairperson, Mr Jeff Radebe. They could not keep going on around in circles. Had a letter been sent to Minister Radebe? Why was he not part of the meeting? What had happened?

Co-Chairperson Capa said that the Committee had not said that Minister Radebe had to be there. In fact, the Members knew that there was supposed to be a ministerial meeting that morning and the Committee had said they would go and find him at that meeting, but she did not disagree that there had been discussion about the IMC and that it would have been good to have Minister Radebe present; but that did not remove the fact that the Committee needed to talk about the deadlock. There had to be facilitation of how they went about breaking the deadlock. She asked the Co-Chairperson to respond directly on whether Minister Radebe had been contacted.

Co-Chairperson Godi informed the Committee that he had interacted with Minister Radebe who had said that he was not a member of the IMC, or the Chairperson of the IMC – that was the President of the Republic.

Ms Khunou said that the Committee had had four or five meetings with SASSA and it was the second time that SAPO had been given a chance to present, besides the meeting that SCOPA had had with SAPO in Pretoria. She did not know what engagements the Portfolio Committee for Social Development had had with SAPO. She did not know whether Members understood the importance of the whole matter. It had been said that if one played with the most vulnerable people, one was dealing with God. She did not want the government or the country to be judged by God for the mistake that was being made. The Members were talking about the most vulnerable people, the poorest of the poor. It seemed that officials were saying that they did not care what happened to them. The Committee had had so many presentations in which SAPO said one thing and SASSA said another thing. SCOPA had repeatedly told the two to meet as government entities. The Committee did not want a service provider from Australia to come and deal with issues in the country, especially when there were so many problems. Asking questions would not get the Committee anywhere. She proposed that if it was the President who was the Chairperson of the IMC, then the Committee had to meet with the President as soon as possible, as they were going nowhere. Everyone was working hard, including the officials. The Committee needed to meet with the President as soon as possible, as on 31 March 2018 there was going to be a problem. The Members were going to fight and ensure that Cash Paymaster Services (CPS) would not come back.

Co-Chairperson Capa asked Members to please assist her by being brief.

On a point of order, Mr C Ross (DA) supported Mr Smith’s proposal that the matter be referred to the IMC but Members needed to be allowed to ask questions first so that they could have in-depth knowledge. Obviously, the Members all supported the principle of breaking the deadlock. If the Chairperson allowed the Committee to ask questions as in the normal process, Mr Smith’s proposal about the IMC could be put to the Committee.

Co-Chairperson Capa agreed that she was moving towards that point.

Mr E Kekana (ANC) said that Co-Chairperson Capa was not recognising hands.

Co-Chairperson Capa explained that other hands were up first. She was telling the truth! Ms Malgas’ hand was first up.

Ms H Malgas (ANC) was concerned that the Committee was setting a precedent. The Co-Chairpersons had given the order for the meeting and the Minister of Social Development had spoken first and then the Minister of Communications who had said that procurement was not his purpose. In the 24 October meeting, SASSA had said that it was meeting SAPO on 26 October 2017. The Minister, as the political head of SASSA, had not informed the Committee of what had taken place in the meeting on 26 October, so she was asking for a short input from SASSA before the Members continued with their questions.

Co-Chairperson Capa stated that she was not going to respond to it at that moment because Members were asking questions about today’s presentations. She had not locked out the Minister and SASSA.

Ms L van der Merwe (IFP) thanked the Ministers and the teams for the presentations. As indicated by Mr Smith, it was very important that the deadlock was broken because the process had been going on for a long time and there were only five months left until April 2018. The payment of social grants was what stood between life and death for millions of South Africans. Politicking, fighting and going around in circles was no longer an option. She wanted to get to the issue of breaking the deadlock. She had listened very clearly to Mr Barnes who had said that SAPO had the footprint, the capability, capacity, history, background and had done it before. She wanted an answer from Minister Dlamini whether it was simply a case that SASSA did not want to work with SAPO. She needed a clear unambiguous answer to that question. Did she prefer a private service provider? What had changed in terms of the Magwaza letter? Mr Magwaza, the former SASSA CEO, had felt that SAPO had the capacity, so why were they sent a non-offer in October? The previous day, the Minister had said, in a press conference, that SASSA would only be finalising this procurement process at the end of February 2018. Was the Minister admitting that she would not meet the 1 April 2018 Constitutional Court deadline? Was she not concerned that she would be in contempt of the highest court in the land? Ms van der Merwe asked Mr Barnes if SAPO was planning to take legal action to enforce the offer letter sent by Mr Magwaza.

Dr Q Madlopha (ANC) stated that the previous week, the Committee had indicated that a fact-finding meeting would be held because most Members had not agreed with the shortcomings presented by SASSA. Members had agreed that the political heads needed to attend because the matter dealt with service delivery and the lives of the people. The previous week, the Committee had listened to the SASSA presentation and at the current meeting, Members had heard from SAPO. However, the Minister of Social Development had said that the SAPO presentation did not correspond with what had been communicated in the correspondence between the two entities. The SAPO CEO had said that the Post Office could do everything, but SASSA said that they could not. The Committee wanted to hear what had transpired in the SAPO response to SASSA the previous week. SAPO had originally said that it could only produce 2.4 million cards and not 4.2 million but in his presentation, Mr Barnes had said that SAPO could meet 97% of the criteria. Members wanted the facts. When SAPO failed at the end of the day, SASSA would be held responsible. Members wanted to understand the SAPO capabilities and that it was not going to outsource work.

Mr Kekana reminded Members that the reason for the adjournment of the meeting the previous week was that there was to have been a meeting between SASSA and SAPO the following day. The Committee had decided to allow that process to continue. Today SASSA had indicated that there was a deadlock. Mr Smith was very clear that a deadlock breaking mechanism had to be found. Is this Committee meeting a negotiating forum? If not, the Committee should refer the matter to the correct structure to get a solution to the problem. The Committee did not want to sit the entire day lamenting who was right or wrong. The Committee should get the President, as IMC chairperson, to a meeting and indicate to him that there was a deadlock and the two entities did not agree. The President had to resolve the matter.

Mr T Brauteseth (DA) said that it had been agreed at the beginning of the meeting that the Committee needed to ask questions and get responses as was the normal SCOPA fashion. The barrage of questions simply got the officials off the hook as they sat back and listened to the Committee Members. The entire purpose of the meeting was to apply the audi alteram partem rule. SAPO had given the other side. He had heard what his colleagues had said about breaking the deadlock, but there were a lot of subtexts and sub-tones going on that needed to be clarified. If the undertones were not resolved, the parties would report back in a month that they still could not break the deadlock and then it would be four months to 1 April 2018. And so, it would continue. He wanted to delve into issues at this meeting. It was a very strange SCOPA environment and not what he was used to.

Co-Chairperson Capa said that it was not a SCOPA meeting but a joint meeting with SCOPA and the Portfolio Committee on Social Development. The Members from Social Development were not visitors.

Mr Brauteseth asked Mr Barnes to confirm how long he had been in the banking industry. Could Mr Barnes confirm the calculations of Mr Brauteseth and his colleagues that in order for SAPO to upscale to assist in the payment of grants, SAPO needed to spend around R650 million, plus an additional R50 million per year, totalling R900 million. He noted that the Minister of Social Development had said on a number of occasions that the cost of the project would amount to R6.4 billion. He asked SASSA to explain the difference between the two amounts. He did not think that the Minister was entirely in touch with what was going on in SASSA, so he asked whoever in SASSA could answer …

Minister Dlamini objected to the Member throwing comments at her.

Co-Chairperson Godi responded that he had understood Mr Brauteseth to be referring to day-to-day matters but he upheld her objection.

Mr Brauteseth said that he did not know sarcasm was unparliamentary.

The Minister again objected and Co-Chairperson Godi asked him to withdraw his statement which he did, stating that he would not engage in a battle of wits with an unarmed person.

Mr Brauteseth asked the SASSA Acting CEO what exactly in the CSIR Report had disqualified SAPO from taking on the work. If not SAPO, which company, or group of companies, did SASSA have in mind, in South Africa, that could do the work, and were ready to do it? They had to have someone in mind. In the plan, they had to be thinking that SAPO could not do it, but there was another company. If she had another company in mind, what did she think that that company would cost? What scenario cost projections had she made, considering the R650 million and the R6.4 billion? The Request for a Proposal (RFP) was not in the CSIR document. Could he please have it? Members wanted to see who had written it and what the terms of reference were. Why had SASSA not involved National Treasury in engagements with SAPO? There had been 13 interactions between SASSA and SAPO. Did CPS have a banking licence? The fact that SAPO did not have a banking licence had counted against them. Therefore, he wanted to know whether CPS had a banking licence

Mr M Hlengwa (IFP) said that, at one meeting, he had said he was not a prophet but he had issued a warning then and his worst fears had come to life: On 1 April 2018, CPS would be there, paying the grants as there was an effort to derail SAPO. And that was precisely what was happening. The Committee had requested the details of the May workshop between SASSA and SAPO and they had never received the details. The Committee had gone to the SASSA offices after SASSA had failed to meet its own deadlines. And the Committee had been happy when SASSA had told them that they were committed to their own commitments. However, those commitments had come to zero. What was happening was that the Members were being undermined to the gutters. How could qualified people (and he used the term cautiously) engineer a national catastrophe of such a magnitude and there were no consequences? They had lied. It was SASSA that had told the Committee that the Minister Jeff Radebe was the IMS Chairperson. The Members were being fed lies day in and day out. All South Africans were being undermined by those officials. SASSA and CPS were bosom buddies. Members had seen the musical chairs played by officials who had tried to do the right thing, but had been chucked out because a national catastrophe was being engineered. They had engineered a catastrophe when the CPS contract came to an end and were engineering one currently.

Mr Hlengwa was adamant that the IMC would not solve the deadlock. SASSA had failed because they had not done their work. IFP was not asking questions. A parliamentary inquiry was required to look into the matter. They had spoken about contract management. SASSA had engineered a catastrophe when the CPS contract came to an end and were engineering one currently. If it walked like corruption, smelt like corruption, then it was corruption. He told the SCOPA Chairperson that by the end of business that day, he would receive a letter from the IFP requesting a parliamentary inquiry into SASSA.

Mr Hlengwa asked the Director General of National Treasury why he had said that Treasury had granted the deviation for SAPO because Treasury did not want to stall the process. Was that the full reason for granting a deviation? The Committee was being told fairy tales. Certain Committee Members were receiving information outside of the Committee. That was not fair and did not assist the process. He wanted all Members to be transparent. Quite frankly, the Members could sit there till the cows came home, but a decision had been taken by SASSA that they would derail the process because they wanted CPS to keep the contract.

Ms T Chiloane (ANC) stated that the question asked by Mr Smith had not been answered. Echoing what Mr Kekana had said, she did know if the Committee had become a Bid Evaluation Committee. She did not know what the Committee was doing. They had to hold the Executive accountable. They were not mediators. She wanted to see the court judgement implemented by 1 April 2018. National Treasury wanted to be part of the discussion. In a crisis of such magnitude, Treasury could not say that it was not involved. Why was National Treasury not playing a role in a scenario where National Treasury had to give a large amount money to an entity? She asked the Minister of Social Development whether her Department and Agency could not work hand-in-glove with National Treasury as it would ensure progress in the debacle.

Ms N Mente (EFF) said that Mr Smith had asked how one could break a deadlock. Why was the Head of the Hawks, General Yvonne Matakata, not here? Had the Committee stopped inviting the Hawks? The Committee was facing perjury. Criminal charges should be laid against officials who lied to Parliament. Only parliamentarians could say whatever they wished and not be taken to court for it. Officials could not come to account to Parliament and lie. The CSIR Report, which the SAPO CEO had, showed a different reading from that of the Bid Evaluation Committee. Who had designed the scoring sheet that was designed in a manner that SAPO would fail? How could they break the deadlock? She proposed that both reports be given to National Treasury to evaluate so that Treasury could present a report to the Committee the following week, indicating whether SAPO was able to give grants or not. It would never be sorted out between the Committees, SASSA and SAPO. Another body needed to do an evaluation. She supported Mr Hlengwa in the request for a parliamentary inquiry. Who was cooking the failure of the process so that CPS could come back the following year? Who was steering the ship in the wrong direction?

Mr Ross stated that the DA also supported the request for National Treasury to play a leading role and to furnish the Committee with a report within two weeks. The DA also supported an inquiry, but time was of the essence and parliamentary inquiries took a long time. If the Committee had been misled and Minister Radebe was not the IMC chairperson, but the President, the information cast aspersions on SASSA. He expressed disappointment that the matter had not been raised at inter-ministerial level. SCOPA should ask if the matter had been raised at the IMC and ask for minutes to ascertain if there had been a neglect of duty.

The Chairperson asked Mr Ross not to make statements on behalf of the DA but to ask questions as a member of SCOPA.

Mr Ross asked Mr Barnes about the R3.7 billion that SAPO had received in the medium-term budget with regards to debt settlement. Would it not have been more advisable to spend the funds on infrastructure and systems? The Auditor General had indicated that SAPO was one of those entities in 2017/18 that might not be able to continue as a going concern. The Committee needed to take note of that. He wanted a response from SAPO. Lastly, he wanted to dispel misconceptions about the banking licence. SAPO had made an application for a banking licence on 26 June 2017. Had that license been granted? Or was SAPO only operating in terms of Treasury regulations?

Co-Chairperson Capa observed that Members were asking questions to the Minister, SASSA and SAPO, which was the matter at hand. There was a strong feeling that people were speaking for the sake of speaking, but every Member had a right to speak, whether it was foolish or wise. Members were not obliged to follow another person and it was each Member’s right say what he or she thought. But at the same time, recommendations had been made but they had not been fully discussed and therefore not been entertained, but those recommendations were seen as decisions. She needed to understand how the meeting was being managed. People were complaining, but her view was that everyone had to speak as it was a key democratic process. It had been agreed that the Committee would approach the IMC and she did not know when they would invite the President to come. The Committee had taken a decision that after the meeting, they would try and interact with the IMC. It was Co-Chairperson Godi who had been interacting with the IMC and she did not know whether they were going to come to the meeting. She needed clarification.

Co-Chairperson Godi stated that as they moved towards the end, he would try and pull everything together and come up with a way forward. He had not said a word at this stage.

Ms E Wilson (DA) was very distressed that the situation was exactly the same as it had been a year previously, and the poor and the vulnerable were being held to ransom. The grants had to be paid. It appeared that the process was being manipulated and it was the poor and vulnerable that would suffer. It was terribly frustrating. At the 24 October meeting, the Acting SASSA CEO said that National Treasury and SASSA were not meeting eye to eye in terms of the financial requirements. She found it disturbing that the SAPO CEO talked of R650 million while the Minister talked of R6.4 billion. The gap in that picture was alarming. She asked the Minister of Social Development if she had been at the meeting with SAPO the previous week when negotiations had taken place and the contract had been cancelled or suspended. If not, why not, as she was the Accounting Officer in the matter. Who was reporting to the IMC and who attended? Was it the whole of SASSA? Why did SAPO not attend? Who wrote the RFP that was given to SAPO and when was it written? The RFP had been worked on since 2014, with a whole advisory team for over three years, and then suddenly the RFP was written in July 2017. Who wrote it? She pointed out Sections 2 and 3 of the CSIR report were missing. Why did Members not get the whole report and the RFP to do a comparison? She had read the CSIR report and not on one page could she find anything that said SAPO could not do the job. SAPO had to upscale, train and get more staff, but it did not say that SAPO did not have the capability to do the job.

Ms B Masango (DA) thanked the Ministers and their teams for the presentations. She asked if the press conference the previous day, had been the result of the meeting between SASSA and SAPO. It felt as if the Members were back in 2016 as the same thing had happened then. During the time when preparatory work was being done, there had been a task team of Social Development and Treasury Directors General, the SASSA CEO and the South African Reserve Bank. What had happened to that task team or had its work come to an end and was that why the matter was where it was? She wished the IFP all the best in getting a parliamentary inquiry because the DA had tried that the previous year, and that was probably why they were in the current position.

Ms P Sonti (EFF) Ms P Sonti (EFF) said she was very pained because DSD was important to South Africans. SASSA together with SAPO seemed to be playing games with the security of the livelihoods of very elderly people. She had been waiting to hear better reports to take back to our constituencies, which remained poor but she was doubtful that in the remaining five months SASSA and SAPO would have found each other. She was sceptical that President Zuma would provide a solution. She was adamant that there was no hope when one talked about the President.

Mr Booi supported SAPO as a relationship between SASSA and SAPO would be a working relationship. The matter had to be resolved. The Members were not interested in CPS. The joint Committee had to accept the report of the panel. The Committee was not sure how the IMC worked, but it was necessary to re-engage the IMC. It was necessary to take a step up. The SAPO CEO had expressed the capabilities of SAPO quite solidly. The panel of experts appointed by the Constitutional Court had said that SASSA and SAPO were to work together. The SASSA CEO had been asked to tell the Committee exactly what the problems were, but she had not done so. The panel of experts had concerns about the leadership of SASSA and that was where the problem lay. The Committee had confidence in National Treasury and so it had to be involved. It was important that National Treasury gave leadership. It could not outsource that role. Everyone had run around in circles. The panel of experts had complained quite a lot about a lack of information.

Mr Booi stated that he would have supported Mr Hlengwa, but the problem was that there was only a few weeks until Parliamentary recess. So, what would happen until Parliament sat again? Tenders could not be issued in February. The Committee was not going to run away. If there was irritation amongst the Members, it did not matter. Why go to the IMC as both Ministers sat on that IMC but they had not told the Committee what was happening. The situation could not go on year after year, even the Court had tried to intervene.

Ms C Dudley (ACDP) said what had not come out was what would break the deadlock. She wanted to know what the Ministers believed could be done to break the deadlock.

Ms Khunou stated that the SCOPA was the defender of the public purse and Members should not be apologetic about that. She had spoken the previous week about the history of problems that SASSA had had in paying the grants. In 2012, CPS was awarded a five-year tender. AllPay had taken SASSA to court saying that it was unlawful. Treasury should have been involved. The Chief Procurement Officer should have been part of the process, and if he had been, the situation would have been different.

The new Acting Chief Procurement Officer, Mr Willie Mathebula, who had accompanied the Treasury DG, was introduced to the Members and welcomed

Ms Khunou continued. The Regulations of Treasury were quite clear about unlawful contracts. No one was above the law. Parliament could not create legislation and then help someone to break its legislation. She stated that Mr Mathebula had been ill-advised by the officials. Maybe PMG should give him all the notes of the meetings that the Committee had had with SASSA. SASSA had paid CSIR to write a report for them, but they had not even honoured the report. The Committee Members should meet with the President to get to the bottom of the matter. There were not even five months left, but actually two months in practical terms, for SASSA to ensure that grants would be paid on 1 April 2018. SASSA could not write a proposal or adhere to any decisions. On the other hand, SAPO CEO had not given all the information required. His presentation was good but when it came to the tender process, SAPO had not completed the forms fully and correctly and had not explained exactly what they could do. The Committee had been given information by SAPO and most of the questions were based on those discussions with SAPO. When the Chairperson concluded the meeting, he had to come up with a clear position of what the Committee was going to do as everyone was under pressure. Ms Khunou declared that the Committee was the mouthpiece of the mouthless.

Co-Chairperson Godi stated that Members had all had an opportunity, as per the plan, to ventilate their frustrations, and Members were interested in getting responses from SASSA, SAPO and National Treasury. The Committee wanted to hear all the details about how things worked and what could be done.

Co-Chairperson Capa asked the Minister of Social Development and her team what would happen if SASSA put out a tender and SAPO were bad losers and took SASSA to court. She would not say more because SAPO was there. The advertisements had not gone out earlier because of SAPO. What if a tender was issued and SASSA went through the whole procurement process, and then there was a dispute? How could they then pay grants without deviating from the Court judgement? She wanted the assurance that they would pay even if there was a court case.

SASSA response
Minister Dlamini referred to some Members and spoke about an extension of Black Monday.

Co-Chairperson Godi censured the remark about Black Monday.

Minister Dlamini noted that CSIR was a state institution like the Post Office. She needed to be assisted to find the 93% adherence found in the CSIR Report, by SAPO. There was a summary in the Report. It was in the Report and the Report should be read. She was told not to involve herself in matters of officials but at the same time, she was told to attend meetings. She had signed a letter of concurrence and thereafter officials knew their marching orders and they had to report back and then they would take the process forward. It was not true that the officials were misdirecting the Committee. She had to disagree with that. Everyone had been talking as if they were the only ones who wanted SAPO. She had said that SASSA would work with SAPO, but there were assumptions, and not empirical evidence that said everything should be given to SAPO. The RFP had been given to SAPO as SAPO was a state institution. SAPO was given priority and so what was being said had no basis. SASSA had written asking SAPO to expand on responses and SASSA had copies of those letters. Everyone understood what a workshop was. Decisions were not implementable.

The whole IMC had agreed that there had to be due diligence. She was not going to talk about what was said in IMC but someone was supposed to look into whether SAPO could upscale but that had never happened. It was not a family company. She was saying that SASSA could not go forward after a workshop as that was not enough to test the capacity of SAPO.

Minister Dlamini stated that, after receiving the letter from SAPO, the Acting SASSA CEO had engaged with National Treasury before responding to SAPO. On 3 November 2017, SASSA would be moving on with the processes of procurement and SAPO should enter into the process, rather than stopping the work that they were doing. SASSA also wanted SAPO to give a consolidated report because SASSA could not work with separate reports. She would not talk about letters that had been sent from SASSA as the Committee knew about concurrence. Government institutions were expected to follow proper processes but, when it suited Members, they not to follow proper processes. She asked who had given incorrect information about who chaired the IMC as all SASSA officials, SAPO, National Treasury, Home Affairs, Transport, Communications, Labour, Health and Science and Technology attended IMC. There was also a Technical Committee led by the Director General in the Presidency.

The Minister replied she did not know if CPS had a licence but CPS had presented a letter from ABSA and Nedbank. Why had SAPO not stated in the bid response that they were working with Standard Bank? On the R650 million and the R6.4 billion difference, she had said plus R5 billion but that was to transform the entire process after officials had looked into the strategy. For the payment of grants, SASSA was paying CPS R16.45 per beneficiary but the Post Office wanted R21.20 per beneficiary.

Minister Dlamini said that when Committees in Parliament and those outside of Parliament asked for a Request for Proposal before the service providers had received it, and wanted to know who was in the procurement team, it was alarming. It was especially alarming when MPs wanted to know who was in the Bid Committee as if they wanted to go and lobby some people. SASSA officials were shocked to hear that a letter from the CEO had been given to Members of Parliament. One MP had said that he had spoken to so-and-so. If Parliament was a lobbying place, everyone had to lobby. SASSA had written to SAPO and was moving forward with the process. SASSA was not going to be challenged by SAPO. They needed advice from Parliament and not inquiries as if SASSA was not doing its work, as it was.

Minister Dlamini agreed that National Treasury should be part of the work and give guidance on some issues that were getting out of hand. She wondered whether all departments were going to have to discuss procurement in the Portfolio Committees in Parliament? Everyone knew that the work that SASSA did was very important as it was about the people. They did not have to be told. SASSA had subjected itself to following parliamentary processes.

Co-Chairperson Godi intervened to settle the meeting after the Minister responded to an interjection.

Minister Dlamini added that it was not as if they had a bad relationship with SAPO but anyone who worked together did not agree on everything, as was the case in Parliament. She stated that SASSA was moving forward.

Co-Chairperson Godi asked the Minister to explain more clearly about the tender and the fact that SAPO had to give a consolidated input. How did the Minister see the process of engaging? How were they going to try and find each other?

Co-Chairperson Capa asked Members to allow the Ministers to present and the Chairperson to chair the meeting.

Minister Dlamini suggested that SAPO should respond to the question. SASSA had been asking for a meeting with SAPO. SAPO should not just say what they were going to do and what should be given to other people, when they had not responded to questions in Parliament.

Co-Chairperson Godi asked the SASSA CEO for input about the meeting with SAPO.

Ms Pearl Bhengu, SASSA Acting CEO, said that the Chairperson should ask the Post Office what had unfolded as it had been given a part of the SASSA contract.

Co-Chairperson Godi said that SASSA had said at the previous meeting that they were going to meet with SAPO on 26 October to iron out things. The expectation was that SASSA would report back to the Committee that it had signed with SAPO and that the other processes were going forward. But what the Committee was hearing was that SASSA had not yet signed with the Post Office. So, what was happening?

The SASSA Acting CEO began to speak but was interrupted by the Minister who said that she should wait a minute. The Minister said that from what SAPO was presenting, SASSA and the Post Office were still too far apart. Everyone was in a panic situation because they could see that even if SASSA and the Post Office went to a meeting, they would not agree. The presentation showed that there was a disagreement and that was where the deadlock would come in. The process was paralysed because SASSA depended on SAPO having a clear timeframe and a way forward. SAPO had said that they were dissatisfied. The Minister did not know if the Committee would continue finding issues as SASSA and SAPO were poles apart. That had to be addressed. SAPO was not going to move, and SASSA had said that the information was too scanty. Both CEOs had to tell the meeting on how to deal with the impasse; or perhaps there was no impasse.

Ms Pearl Bhengu, SASSA Acting CEO, explained that she had sent a letter stating that SAPO had been given the role of systems developer, plus biometrics, and certification which was one of the four areas in the grants payment process. SAPO had asked for an extension of the three days given for them to reply. The response from SAPO stated that the Post Office would only do what had been offered, if the banking part was included. Instead of SASSA answering the letter, SASSA and SAPO had had a meeting. At the meeting, Ms Bhengu explained that because of the procurement processes that had unfolded, she as the Accounting Officer was unable to change the results of the evaluation and what the bid adjudication process had awarded to SAPO. She could not change the process, but she thought that SAPO could grow efficiencies beyond the first area. She had said that SASSA could use their old and dilapidated buildings as pay points but SAPO had responded that they were sticking to the letter from Mr Magwaza and would not take what she was offering. She had explained that she was not able to change the procurement process. She added that if the Chairperson checked in the document, SAPO had said that they could produce 10 000 banking cards per day which was too few. That was in the bid document.

The Chairperson asked to which document she was referring him but she responded that he did not actually have the document. He asked SAPO why they had not attended the meeting with SASSA on 26 October 2017. Why did they not talk, instead of sending letters?

Ms Khunou asked for SAPO to answer the questions raised by Members.

SAPO response
The Minister of Telecommunications and Postal Services responded that he understood that there had been meetings between SASSA and SAPO and that the purpose of those meetings had been to find a solution and resolve the matter. He pointed out that he did not know if it was a procurement process or an inter-governmental process as per the Intergovernmental Relations Framework Act of 2005, starting with the PFMA and then following intergovernmental processes. SAPO had believed that it was involved in an intergovernmental process because both the previous and current SASSA CEO had based their information on the Intergovernmental Relations Framework Act. As per that Act, SASSA had received the approval for a deviation from Treasury and now had to follow the appropriate processes. That was very important in terms of the mechanism for breaking the deadlock. It had not been called procurement, but a collaboration in which SAPO would assist SASSA. SAPO had not rejected the process but suggested that SASSA come with a solution. He had hoped that the officials would have found the solution.

Minister Cwele said that the CEO would respond about the number of banking cards as it was not a do or die issue. They were not comparing apples and apples but different things. SAPO believed that it was possible to resolve the matter if the legal prescripts were followed. The law had its own deadlock breaking mechanism, and there was a need to comply with the directives of SAPO Board. The IMC did not meet regularly, but met whenever there were challenges and there was a need to offer guidance. The last meeting in September had been about the Constitutional Court but, at that time, the Ministers were satisfied about the timeframes and the processes. However, the IMC could meet and deal with the impasse. The Minister did not believe that SAPO had, at any stage, tried to sabotage South Africans who were dependent on grants.

SAPO CEO, Mr Barnes, said that he was open to a solution. He had had a very productive meeting with the SASSA Acting CEO and he thought the CEO also wanted a solution. The sequence of events needed to be set out correctly. SAPO had received the letter offering one part of the process on the evening of 18 October 2017 giving the Post Office until the evening of Saturday 21 October to respond. He had asked for an extension as the response was required in the middle of the weekend. In the end, he had responded on 20 October 2017, well within the period. He had had a meeting with the SASSA CEO on 19 October, the day after receiving the letter, to better understand what had been said. The disconnect was not based on ill-will but on a lack of understanding of the processes of evaluation and a deep misunderstanding of how a bank works and what the different cards mean. There was no malice in the misunderstanding. The CSIR, itself, had said that 60% of the request for due diligence was not well founded. The CSIR had not expressed itself in many categories because it did not understand the essence of the debate. He believed that if the CEO and he could sit together, they could find common ground and they could teach other in terms of what had been meant and what SAPO could do and so forth. SASSA was not familiar with banking terms. A lot of the problem was due to an inability to evaluate the capacity of the Post Office resulting from a lack of deep understanding of the banking environment. He, like the Minister, had believed that it was an intergovernmental relations framework interaction and not something driven by the rules of the open tender process.

The CEO referred to the five categories in the CSIR report which had been evaluated as could perform, could not perform, or could partially perform. He counted the number of criteria in the category of ‘could not perform’ and found eight out of 218 criteria. By logical deductions, SAPO could perform the remaining 210. which was 97%. There had been any number of processes of discovery between the two parties. There was the RFP. There had been meetings and a one-to-one discussion. SASSA had suggested, at one stage, that SAPO reject the offer and that the entire process start again. SAPO was wary of that as they wished to protect what they believed still stood in law, which was the letter signed by Mr Magwaza.

Mr Barnes responded that he had been in the banking industry since 1984. The amount of R650 million as the cost of the process was the number that SAPO had determined. It was possible that both the mandate given to CSIR, and CSIR itself, was not clear about the constituent parts of the social development grant. It was a simple system, but required lots of volume.

On the R3.7 billion allocation for debt, Mr Barnes replied that it had originated in discussion with banks but SAPO was meeting with them in following week as the Post Office was looking for investment capital and not settlement of debt capital. SAPO had a net asset value of R940 million prior to the capital injection, and no solvency problems, although the Post Office had a liquidity challenge.

On the banking licence, Mr Barnes replied that SAPO had to submit more information relating to aligning the Banks and Companies Acts, and it was a question of which capital construct the Reserve Bank would be happy to deal with given that the natural holding company of PostBank would be SAPO, and the Committee was aware of its previous state of financial distress.

The CEO referred to the report by the panel of experts which had been signed on 12 September 2017 and was out of date. It related to discussions that the panel had had before it had met with SAPO. SAPO met with the panel on 17 October 2017. That report had not yet been produced but it would contain up-to-date information. SAPO was again meeting with the panel the following day. He cautioned that South Africans should not find themselves lost between process and reality. Parliament should delve into the possibilities of SAPO paying the social grants, thus retaining capital in the fiscus, and ensuring that SAPO could build an asset for the country, rather than relying on private providers.

The SAPO Board Chairperson stated that SAPO wanted to talk to SASSA, and was talking to SASSA but at the same time, as board directors, the Board had to be responsible and they could not allow someone to walk away from a legal appointment. There were discussions and processes in terms of the legal framework where disputes were regulated but SAPO was prepared to do what was necessary to resolve the matter.

Co-Chairperson Godi asked SAPO if the offer for a meeting to look at what what SASSA was saying, was still on the table. He understood that they reserved their rights in terms of legal processes.

He replied that SAPO wanted to engage but the SASSA CEO had said that SASSA could not move because it had to adhere to what the Bid Evaluation Committee and Bid Adjudication Committee had approved. There was no point in engaging unless she could move as SAPO would not accept the single item of the process that SASSA was offering. If there could be engagement without these restrictions, then SAPO could engage.

Co-Chairperson Capa said that some Members had said that SCOPA supported SAPO; she cautioned that Committee Members could not say that they supported a particular organisation. SAPO would be assisted to collaborate. The Committee had invited the Reserve Bank to ensure that SAPO could do the work. The Committee wanted to keep its hands off. The Committee did not want to be lobbied, but Members had been called upon not to privatise but to use agencies of government. She did not think that all avenues had been exhausted. As ANC members, they had to support policy. Minister Dlamini was in charge in the government. They were not begging the Minister to do her work, as she knew her work.

Ms Capa stated that only those who had a rural footprint should be allowed to engage in the process. They wanted a situation where people in the rural areas who had small businesses could go and bank and where cooperatives could bank. But perhaps the Committee was fighting about something that it should not be fighting about. The deadlock had been caused by a communications process. If the entities did not resolve it, the Committee would elevate the matter to higher levels. She was telling the CEOs to meet as their cards were not open.

Ms Capa concluded that the meeting had allowed everyone to say what they wanted. The platform had been very helpful. Two government agencies could not hate each other to the extent that they could collapse the state. Members were prepared to listen to the entities at any time but they could not go out without knowing if someone was going to court to dispute a letter. There would be be finger pointing and allegations such as SASSA slept with CPS. She wanted the Ministers to prevail so that they did not allow SAPO to go to court.

Co-Chairperson Godi asked the Ministers to respond

Mr Kekana asked that the Ministers provide a timeframe.

Minister Dlamini said that SASSA was committed to the process but talking made things better. However, coming with different views, they had to stick to their guns. She was not going to read the letter written to SAPO by Mr Magwaza, but all had to read it to have a full understanding. The issue of how long one had worked in a place – where did that come from? If they looked into people, they would find something that they did not want to see.

Minister Cwele said that he had no problem in meeting with Minister Dlamini. They did speak, quite a lot. What would be helpful would be for officials to meet. He was there to oversee processes but did not get involved with procurement. If officials could meet, they could deal with those issues.

Co-Chairperson Godi asked if it was possible to agree that SASSA and SAPO would meet and the following evening, the Committee would meet and get feedback.

Minister Cwele said it was over-enthusiastic to get answers by the following day. The problem was that the Accounting Officers were responsible and if they did not agree, they would be back to where they were now.

Minister Dlamini said it was a must and if the officials did not find a solution, they needed to sit through the night.

Co-Chairperson Godi asked if it was agreed that SAPO and SASSA would meet and report back to the Committee the following evening.

The SAPO Board Chairperson said that SAPO officials would meet.

Co-Chairperson Godi said the Co-Chairpersons would be going immediately to the Office of the Speaker and would meet with the Chairperson of Committee Chairpersons and report to him the outcome agreed to. The SASSA and SAPO officials had to resolve the deadlock. The Ministers were not involved in procurement but he did not want the political heads to be at arm’s length. They had to oversee matters.

Mr Booi suggested that National Treasury was needed in the meeting.

Co-Chairperson Godi asked National Treasury to attend.

National Treasury stated that it would be prepared to observe.

Mr Smith suggested that the Chairperson had to expect both SASSA and SAPO, as well as the Chief Procurement Office to report. There had to be an answer the following day or the matter would have to be escalated.

Meeting adjourned.

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