Social Development Minister Bathabile Dlamini says the South African Social Security Agency (Sassa) will use an open tender process to find providers for three services, after the South African Post Office's (Sapo's) capabilities to carry out the services were deemed too limited.

Dlamini chose a hotel in East London to make her announcement on Monday, despite the fact that Parliament was waiting for an update after she skipped two crucial meetings this month.

Sassa will start another tender process on November 3 after the Post Office was only awarded one of the four services requested by Sassa's bid committee.

"This procurement process will be concluded in the last week of February 2018 and an award will be announced," she said.

Integrated IT payment system

At the briefing, she explained Sassa's reasons for only awarding the Post Office the chance to build an integrated IT payment system. Sapo was not offered the opportunity to provide banking services, card production facilities and cash payment services.

"Sassa's bid evaluation process discovered that Sapo can only produce 2.4-million cards per annum as opposed to the minimum requirement of 4.2-million cards per annum."

Dlamini also said Post Bank did not have a fully-fledged banking licence and could have problems with online connectivity at many rural pay points.

"It is a requirement that all banking solutions in South Africa should have online network connectivity for transacting purposes."

'Grants with dignity'

She also said the idea that Sassa pay points should be shut down "contravenes beneficiaries' constitutional rights to receive their grants with dignity".

Sassa has 10 000 pay points compared to the Post Office's 2 700. Pay points should be within a 5km radius from any beneficiary.

Dlamini said the Post Office could still participate in the distribution of social grants, but that it would have to supplement its current points of sale with new outlets.

"This can be achieved in a very short space of time, through the deployment of ATM’s and point of sale devices that provide cash back."

Sassa will open a paymaster general account after it received approval from the Reserve Bank, to allow it to transfer directly into 2-million beneficiary accounts of those who prefer to use commercial banks.

It has also extended the life of its current payment cards which were due to expire on December 31.

"These cards were supposed to expire in December 2017 and beneficiaries are being informed of these developments through a nationwide communication campaign, using multiple communication platforms which include face-to-face meetings."

Scopa meeting, Dlamini no confidence vote

Sassa made an initial offer to the Post Office on October 18.

But Sapo responded with a counter-offer on October 20, explaining why the four services should not be separated and arguing that its core strength was banking.

However, Sassa rejected the Post Office's counter-offer on Thursday.

Sapo CEO Mark Barnes told News24 on Friday that they will make their position known at a scheduled joint meeting in Parliament on Tuesday.

Dlamini could face a motion of no confidence in Parliament if the meeting does not bear fruit in the Parliamentary committee's eyes.

Scopa chairperson Themba Godi on Friday said he intended to push for a debate on Dlamini's fitness to hold office if there was no specific progress to report, as time was running out.

Five months now remain for Sassa to find an alternative service provider to handle the core aspects of the grants scheme before the March 31, 2018 deadline, as ordered by the Constitutional Court.