The South African Post Office could as soon as next week finalise a contract with the South African Social Security Agency (Sassa) that will see it take over welfare grant payment for the next few years, CEO Mark Barnes said on Wednesday.

“We are writing a contract. We are working on it now, every day,” Barnes said after briefing Parliament’s select committee on communications and public enterprises on the post office’s performance plan.

“We are hoping to have it finalised by mid-June, so that is next Friday,” he added, but stressed that he did not want to create the impression that it was a done deal because it still needed the approval of Social Development Minister Bathabile Dlamini.

Barnes had told MPs that the minister had yet to give the go-ahead for the post office to replace Net1 subsidiary Cash Paymaster Services (CPS) as the distributor of some 17-million welfare grants. Responding to questions from MPs, he said he was confident it could perform the service with relative ease.

“The job is not as difficult as the incumbent made out to be. They made it sound difficult on purpose,” he said of CPS.

Barnes added CPS’s technology was not as advanced and hard to match as it claimed, and the use of biometric data was not the obstacle to switching service providers it had been made out to be. He said biometric was also not the fail-safe security check for pension beneficiaries, as people tended to lose their fingerprints with age.

He told the committee that the post office would need a commitment this month to ensure smooth roll-out, saying October would be “too late”. The post office would need an estimated three months to produce 12-million cards with embedded data for welfare beneficiaries to access their grants.

Dlamini in February rejected a proposal for the post office to step into the breach when the CPS contract was about to expire with no alternative in sight. Her objections included that the post office did not have infrastructure in deep rural areas, or the technology to use biometric data which she maintained was the only method of preventing grant fraud.

Barnes noted on Wednesday that CPS did not have a single point of representation.

“They do not even own a tree,” he stressed.

The Constitutional Court handed Dlamini the blame for the welfare grant crisis that unfolded when the expiry of CPS’s contract loomed in March, and it transpired that Sassa was years away from being able to take over payment.

The court instructed CPS to continue providing the service until an alternative was put in place.

Dlamini has recently said it would take five years and some R6-billion to get Sassa ready to pay grants.

Barnes told the African News Agency (ANA) the negotiations with Sassa had proceeded with a view to the interim arrangement running for two to three years, with five years as an outer figure.