Grant tender 'illegal but not corrupt'

The government will not appeal a court ruling that has declared a R10-billion tender to distribute social grants "illegal and invalid".

Social Development Minister Bathabile Dlamini told the media yesterday that although the court had found "irregularities" in the bidding process, it had not set aside the five-year contract awarded to Cash Paymaster Services by the South African Social Security Agency.

Because no corruption had been found in the awarding of the tender, there would be no interruptions in the distribution of grants, 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.

"The final judgment says the procedure is found illegal and invalid. There is nothing that says the process is corrupt. It's business as usual," she said.

The tender involves the distribution of 16million social grants, worth nearly R100-billion a year, to more than 14million poor and vulnerable South Africans.

Allpay Consolidated Investment, a subsidiary of Absa bank, which previously held the contract to distribute most social grant payouts and was one of the unsuccessful 21 bidders, took the matter to the Pretoria High Court earlier this year.

Allpay argued that the tender process was fundamentally flawed because the selection criteria had been altered at the last minute; that "scores" given to the companies in the first phase had been lowered in the later stage, and that one of the members of the bid evaluation committee had been biased towards Cash Paymaster Services.

But Dlamini said there had been no evidence of conflict of interest. She maintained that Cash Paymaster Services had rightfully won the tender.

Allpay's attorney, Anthony Norton, said yesterday his client was still deciding whether to appeal or to sue the department for damages. "The court didn't find in favour of Cash Paymaster Services," he said.

Cash Paymaster Services said it was "delighted" the court had ruled in its favour.