Net 1 Applied Technology Holdings (Aplitec) CEO Serge Belamant says the company is considering taking legal action against government, Absa and First National Bank (FNB) for breaking tender requirements by providing bank accounts and debit cards to social grant recipients.
Referring to Absa`s Sekulula debit card for recipients in Gauteng and FNB`s bank accounts for recipients in the Eastern Cape, which are both sponsored by local government, Belamant says Absa, FNB and both the local governments have not held to the original tender service agreements.
"There were certain clear criteria in the tender to do with security and cost. The tender specified that fingerprint verification would be needed for security and that the social grant holder would not have to pay for any transaction costs."
Belamant says neither Absa nor FNB have fingerprint recognition for the debit cards and bank accounts.
Aplitec, a supplier of smart card-based financial delivery systems that utilises fingerprint recognition technology, tendered for the original contract, and Belamant feels the tender should be re-issued with new criteria and the company should be allowed to bid under the new tender requirements.
"In my opinion there is a clear case of contract repudiation. Both local government and the banks have altered the original service agreement that the tender was awarded on. If local government wants to change the specifications of the tender, they should do so and give people the opportunity to re-bid," he says.
Gauteng director of social security Gerry Rees says the department is in the process of formulating a response to Belamant`s comments, adding that he is certain there is no issue over the legality of the Gauteng government`s agreement with Absa and AllPay, the Absa subsidiary that developed the debit card.
"Before releasing the Sekulula debit card, we looked extensively at the legality of the project with AllPay to ensure the debit card was legal and in line with the tender`s service agreement," says Rees.
AllPay MD Dirk Kotze says there was no contravention of the tender process.
"It is in the spirit of uplifting communities that AllPay entered into the agreement with the Gauteng government to enhance and improve on the payment system of social grant beneficiaries.
"It still remains the most cost-effective way for the Gauteng government and AllPay to pay out social grants," he says.
FNB spokesman William Ramwell says the bank is confident its agreement with the Eastern Cape government is legal.
"Pensioners and social grant recipients have the right to choose the method of payment, including through a bank. In this case, government is paying part costs of the social grant holder`s bank account. We are comfortable with the arrangement and the legalities thereof," he says.
The Gauteng government and Absa are expected to issue detailed responses to Belamant`s comments later today.
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