News agency, Cape Town, South Africa
Tuesday March 19th 2019

‘Don’t panic’ says Social Development Department following R10billion tender bungle


The Department of Social Development has called on millions of social grant beneficiaries across the country not to panic after the North Gauteng High Court ruled the awarding of a whopping R10 billion tender over the next five years was “illegal and invalid”.

The tender involves the distribution of grants worth R500 billion to about 10, 6 million beneficiaries, including children and the elderly.

The mega tender was awarded by the department’s South African Social Security Agency (SASSA), to Cash Paymaster Service in January after 21 companies had initially submitted their bids.

Social Development Minister Bathabile Dlamini addressed the media about the matter in Cape Town today following Judge Elias Matojane’s ruling on Tuesday.

“The court ruled that there were irregularities in the supply chain management processes which led to the tender award being declared ‘illegal and invalid’.”

However, Dlamini said: “The court acknowledged that those irregularities did not warrant the continued provision of the payment of social grants to be aborted or disrupted.”

Dlamini said they would not appeal the judgment as the ruling had not set aside the continued payment of grants and it would be “business as usual”.

Failed bidder Allpay Consolidated Investment Holdings and 13 others had challenged the awarding of the bid in the High court.

Dlamini said SASSA was strengthening its supply chain management system and in five years time would take over the payment of all grants from private companies.

She indicated that the department now had an “automated intelligence” to track where grants were being paid and had since noted that “482 beneficiaries are receiving their social grants outside the borders of South Africa”.

However, she said that some of the beneficiaries had dual citizenship and they were cautious in dealing with the matter as relations with neighbouring countries had to be taken into account.

She said nine SASSA officials were arrested this year for alleged corrupt behavior and one of them had since been found guilty.

“This and duplicated biometrics on the SASSA payroll is currently under investigation to track patterns of potential fraud.”

She added that they had also detected 815 ‘ghost’ beneficiaries who were not registered on the Home Affairs population register.

The department was also dealing with “illegal deductions” from the grants by micro-lenders (loan-sharks) and unregistered funeral schemes.

She said SASSA was working closely with the Financial Services Board, National Credit Regulator and crime intelligence to deal with the loan sharks.

She said about ten suspects have since been arrested and hundreds of bank cards, pension cards and IDs seized. – Francis Hweshe

Tags: Allpay Consolidated Investment Holdings, Bathabile Dlamini, Cash Paymaster Service, Financial Services Board, Judge Elias Matojane, National Credit Regulator, North Gauteng High Court, South African Social Security Agency (SASSA), The Department of Social Development

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