{"id":2946,"date":"2017-02-25T00:00:00","date_gmt":"2017-02-25T00:00:00","guid":{"rendered":"https:\/\/amabhungane.org\/amabhungane\/stories\/marikana-the-system-is-broken-and-must-be-fixed\/"},"modified":"2024-09-23T11:46:35","modified_gmt":"2024-09-23T11:46:35","slug":"bathabile-dlaminis-game-of-chicken","status":"publish","type":"post","link":"https:\/\/further.co.za\/amabwp\/bathabile-dlaminis-game-of-chicken\/","title":{"rendered":"Analysis: Bathabile Dlamini\u2019s Game of Chicken"},"content":{"rendered":"

Another week passes and social development minister Bathabile Dlamini still rushes headlong at South Africa\u2019s future. Is it a game of chicken, or is it Russian roulette? Most disturbingly, President Jacob Zuma\u2019s lawyer Michael Hulley is quietly advising her. She is hiding him, just like in 2012, when Sassa bent a tender in Cash Paymaster Services\u2019 favour.
\n<\/strong><\/p>\n

On Wednesday, the South African Social Security Agency (Sassa) and Dlamini again presented their plans \u2013 for how welfare grants will be paid from April 1 \u2013 to members of parliament\u2019s social development portfolio committee.<\/p>\n

MPs and observers left confused. amaBhungane did some footwork to try to understand Sassa\u2019s message. It seemed officials and the minister were not clear themselves. They have been at loggerheads for weeks, and on Wednesday appeared to try to present a delicate truce. It is already unravelling.<\/p>\n

Dlamini and her favoured Sassa manager Zodwa Mvulane dominated the floor. For the first time, Dlamini took charge. She was authoritative and appeared to speak for Sassa. Mvulane, who project manages the grant payment transition \u2013 evidently she does a bad job \u2013 was also given time, however.<\/p>\n

This was unlike Sassa\u2019s previous round with MPs when Dlamini bunked and Mvulane skulked in a corner after officials allegedly disregarded Dlamini\u2019s proposals and defied her attempts to cancel the meeting.<\/p>\n

On Wednesday, Sassa\u2019s newly appointed CEO Thokozani Magwaza looked dikbek<\/em> and said little. He is being sidelined, it appears. This morning The Star<\/em> reported that Dlamini was thinking about suspending him for communicating with the South African Post Office about future grant payment models. It is not clear what about this angered Dlamini.<\/p>\n

There are two inter-playing conversations.<\/p>\n

One is: who will pay grants after March 31, when the present contract with Cash Paymaster Services (CPS) expires?<\/p>\n

Two is: who will pay grants in the medium to long term?<\/p>\n

Obviously the most pressing question is the first.<\/p>\n

But the crisis has also diverted attention from doubts about Dlamini\u2019s approach to the medium-term solution. This is dangerous because Dlamini has externalised the work on Question Two to a shadowy group of consultants. Dlamini appointed them on the sly last year and finally admitted on Wednesday that she did not follow proper processes.<\/p>\n

The short answer given for Question One is that CPS will continue to pay grants. It stands ready and able to do the job and Sassa and Dlamini have presented no other coherent option.<\/p>\n

But to confirm that CPS will pay the grants on April 1, Sassa is battling to move three pieces into place.<\/p>\n

First<\/strong>, Sassa must report to the Constitutional Court and explain why it feels it has no choice but to reappoint CPS despite the court ruling that the original CPS appointment was unlawful. The current contract was declared invalid after Sassa botched a 2011 tender in CPS\u2019s favour, but the court gave Sassa time to get its own system in place. Sassa failed to do so.<\/p>\n

It remains unclear why this report was not submitted to the court last October, when Sassa admitted to itself there was a problem, or in December or January or last week, when an application was ready.<\/p>\n

Sassa and Dlamini\u2019s department are staffed by experienced, motivated bureaucrats, so ineptitude can\u2019t be the only explanation. Many other indicators point to malfeasance, as amaBhungane has previously reported. A more innocent explanation, however, might be that the job is simply complicated and the \u201cfactions\u201d have failed to agree.<\/p>\n

Second<\/strong>, Sassa needs treasury approval to deviate from open, competitive tender standards \u2013 the only way to appoint CPS is without going to the market. There is no time for that. But Treasury has told Sassa it will not approve until the court has given direction.<\/p>\n

Third<\/strong>, Sassa must negotiate terms with CPS: cost, length of contract and whether CPS\u2019s parent Net 1 can leverage the contract to sell financial services to beneficiaries \u2013 its current business model.<\/p>\n

They plan to start formal negotiations only next week, with less than five weeks to go before a possible 1 April Doomsday.<\/p>\n

Back in 2016, when it dawned on Dlamini and Sassa that they were not ready to take over from CPS on April 1 2017, it would have made sense for them to try to come to terms with CPS. If successful, they could have taken that option to the court and treasury for approval. If CPS demanded too much from the state, Sassa could have worked on plans B and C.<\/p>\n

Instead, Dlamini sat on her hands. Most disturbingly, even though cabinet appointed Sassa CEO Magwaza in June 2016, Dlamini only installed him in November. For five critical months, she left Sassa without a leader.<\/p>\n

Now things are different. Plans B and C don\u2019t really exist, and CPS holds all of the cards.<\/p>\n

Nevertheless, Department of Social Development director-general Zane Dangor drew a line in the sand on Wednesday. He told MPs negotiations with CPS would rest on two basic terms. The fee had to be within Sassa\u2019s budget, and there could be no deductions for loans, insurance and the like. He also said Treasury would be part of the negotiations.<\/p>\n

It looked like Dangor was trying to pre-empt any backroom deals with CPS, giving Sassa a small amount of leverage in negotiations \u2013 though a commitment to Parliament is hardly battle-proof in the Age of Zuma.<\/p>\n

If Sassa put these negotiating terms before the court \u2013 setting them \u201cin stone\u201d \u2013 before sitting down with CPS next week, its hand would be strengthened. Conversely, if Sassa does not file to court, CPS\u2019s position becomes formidable. In other words, the timing of Sassa\u2019s constitutional court report is critical.<\/p>\n

Enter a Durban attorney named Michael Hulley.<\/p>\n

Sassa\u2019s court report was ready for filing last Wednesday, but Dlamini intervened and stopped this. She did it again the next day and then again. This Wednesday \u2013 with the fierce protection of ANC portfolio committee chair Rosemary Capa \u2013 Dlamini refused to commit herself to a date for the court filing.<\/p>\n

AmaBhungane has learned that Dlamini dispatched Sassa officials to consult with Hulley \u2013 not just in December, as amaBhungane previously reported, but in the days before Wednesday\u2019s portfolio committee meeting.<\/p>\n

Hulley is not Sassa\u2019s attorney of record. It uses the state attorney and it has engaged senior counsel Nazeer Cassim who drafted Magwaza\u2019s court affidavit last week. Hulley, it is said, is pushing Dlamini and Sassa to negotiate with CPS before filing to the court. It is understood Cassim advised the opposite.<\/p>\n

Hulley\u2019s alleged advice firmly favours CPS. This is obviously suspicious. Adding to suspicions is the fact that Hulley is President Jacob Zuma\u2019s lawyer and is central to a number of high profile South African scandals \u2013 notably including the illegal appointment of CPS in 2012.Hulley did not respond to amaBhungane\u2019s emailed questions. Neither did Sassa or Dlamini.<\/p>\n

But with or without a court report, if CPS refuses Dangor\u2019s terms, what will Sassa do? Magwaza told MPs: “We still hope CPS will listen to us and negotiate in good faith.”<\/p>\n

This is wildly optimistic. CPS\u2019s parent Net 1\u2019s revenue streams rely in large part on its ability to leverage the Sassa contract to sell loans, insurance, air-time and other financial products to beneficiaries. This depends on Net 1\u2019s ability to easily deduct money from the grants.<\/p>\n

If Net 1 executive chair Serge Belamant cannot substantially increase the social grant payment fee and maintain his financial services business, the US-listed Net 1 is likely to lose value.<\/p>\n

Belamant made it clear in media statements \u2013 publicly taunting Sassa \u2013 that he will not accept anything less than a fee increase and a long contract extension. He is well known for getting his way and suing when he does not.<\/p>\n

However, on Wednesday, Sassa project manager Mvulane alluded to a fall-back position should negotiations fail. Sassa would run a \u201cshort\u201d tender to distribute cash to deep rural areas and have the banks open accounts for the rest of the beneficiaries \u2013 which could be done in two weeks. Mvulane was vague, but fundamental questions follow.<\/p>\n

If it\u2019s so simple and quick to distribute through the banks, why has Dlamini caused so much gnashing of teeth over extending an invalid CPS contract? Why would she expose beneficiaries to CPS\u2019s allegedly abusive grant deductions for loans and other \u201cservices\u201d? Why the expensive and opaque consultants twisting themselves in knots to find a long-term proprietary payment system \u2013 effectively replacing CPS with another version of the same?<\/p>\n

Why not just pay the grants through the banks and \u201cbank the unbanked\u201d once and for all \u2013 using accounts of their own choice?<\/p>\n


\nThe amaBhungane Centre for Investigative Journalism produced this story. Like it? Bean amaB supporter<\/a> and help us domore. Know more? Send us <\/em>a tip-off.<\/a><\/em><\/p>\n","protected":false},"excerpt":{"rendered":"

Another week passes and social development minister Bathabile Dlamini still rushes headlong at South Africa\u2019s future. Is it a game of chicken, or is it Russian roulette? Most disturbingly, President Jacob Zuma\u2019s lawyer Michael Hulley is quietly advising her. She is hiding him, just like in 2012, when Sassa bent a tender in Cash Paymaster Services\u2019 favour. <\/p>\n","protected":false},"author":2,"featured_media":22373,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[2],"tags":[],"class_list":["post-2946","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-stories"],"acf":[],"_links":{"self":[{"href":"https:\/\/further.co.za\/amabwp\/wp-json\/wp\/v2\/posts\/2946","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/further.co.za\/amabwp\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/further.co.za\/amabwp\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/further.co.za\/amabwp\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/further.co.za\/amabwp\/wp-json\/wp\/v2\/comments?post=2946"}],"version-history":[{"count":1,"href":"https:\/\/further.co.za\/amabwp\/wp-json\/wp\/v2\/posts\/2946\/revisions"}],"predecessor-version":[{"id":30673,"href":"https:\/\/further.co.za\/amabwp\/wp-json\/wp\/v2\/posts\/2946\/revisions\/30673"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/further.co.za\/amabwp\/wp-json\/wp\/v2\/media\/22373"}],"wp:attachment":[{"href":"https:\/\/further.co.za\/amabwp\/wp-json\/wp\/v2\/media?parent=2946"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/further.co.za\/amabwp\/wp-json\/wp\/v2\/categories?post=2946"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/further.co.za\/amabwp\/wp-json\/wp\/v2\/tags?post=2946"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}