The court ruling comes after Net1 UEPS, a payment solutions provider, won a 10 billion rand government tender in 2009 to distribute social grants through its Cash Paymaster Services (CPS) unit.
AllPay, a subsidiary of Barclays Africa, thereafter took to court after losing the five-year tender to [DATA NT1:Net1] on accusations of foul play in the tender process.
The Constitutional Court recently ruled the process as constitutionally invalid, and that a new process had to be conducted to remedy the fault.
“It’s a fair judgement. It’s important that invalidity and not illegality is at stake here, so there’s been no fraud and corruption in the actual process. There were infractions in the process, as the Constitutional Court is the highest court in the land that felt, unlike the Supreme Court, that every little T [had] to be crossed and I to be dotted,” Virginia Peterson, CEO of the South African Social Security Agency (Sassa), told CNBC Africa.
(WATCH VIDEO: ConCourt rules in favour of AllPay)
CPS has since been ordered by the court to continue carrying out its obligations.
“We as Sassa now first want to reassure all our pensioners that there will be no disruption in the pay-out system. And I think the Constitutional Court was really clear on this. It says that we are giving you sufficient time to go and devise a process to report to us on this process and go out on a new tender process,” Peterson explained.
“The court has also said to us that the Sassa should not subject their beneficiary, the poor and frail, to a re-registration process again.”
Pieterson added that the new process, as ruled by the court, will require that Sassa consult experts to assist in the writing of the next request for proposal to ensure no impropriety or fraud.