The Supreme Court of Appeal of South Africa (SCA) has dismissed the Cash Paymaster Services application for leave to appeal a March 2018 High Court order.
The order set aside the agreement between CPS and the South Africa Social Security Agency (SASSA), and the subsequent payment of R317-million (R277-million excluding VAT), and ordered CPS to refund the amount with interest from June 2014 to date of payment.
As previously disclosed by the company in June 2014, CPS received approximately R277-million from SASSA related to the recovery of additional implementation costs it incurred during the beneficiary bulk re-registration process in fiscal 2012 and 2013.
After the award of the tender in January 2012, SASSA requested CPS to biometrically register all social grant beneficiaries (including child grant beneficiaries) and collect additional information for each child grant recipient, materially higher than what was originally cited in the Request For Proposal.
CPS agreed to SASSA’s request and performed approximately 11-million additional registrations beyond those that it tendered to register for as part of the quoted service fee.
Accordingly, CPS claimed a cost recovery from SASSA, which agreed to pay R277-million as full settlement of the additional costs incurred by CPS.
“We are disappointed with the SCA judgment and will study the judgment to determine our next course of action,” says Herman Kotzé, CEO of Net1. “We reiterate our view that the additional registrations we performed based on SASSA’s specific request, resulted in the identification and removal of a significant number of ghost beneficiaries and duplicate grants, and had the direct result of saving the South African government more than R2 billion per year.
“The cost incurred for the additional registrations was recovered without any profit component. CPS performed the work requested by SASSA on a bona-fide basis, and it is unfortunate that it once again finds itself being prejudiced by apparent shortcomings in SASSA’s procurement processes,” he adds.