NEWS & ANALYSIS

DA calls on SAPO, PostBank to account for state capture contracts – Cameron MacKenzie

This follows recent reports of gross interference by both boards, says MP

DA calls on SAPO, PostBank to account for state capture contracts

24 February 2020

The Democratic Alliance (DA) has written to the Chairperson of the Portfolio Committee on Communications and Digital Technologies (CDT), Boyce Maneli, requesting that he convene an urgent meeting with all stakeholders, past and present, to explain the alleged attempts to ‘capture’ SAPO and PostBank and the billion rand supply contracts at each entity.

This follows reports over the weekend of alleged gross interference by both the boards of SAPO and PostBank, impacting the daily operations of the entities, and revealing misconduct by board members, supply chain irregularities, and possible corruption.

Allegations of impropriety at the SAPO include the suspension of Acting CEO, Lindiwe Kwele, and Acting Head of Supply Chain Management, Mothusi Motjale.

This is preceded by the DA’s submission of an application in terms of the Promotion of Access to Information Act (PAIA), requesting the full details behind the suspensions of both Kwele and Motjale.

Furthermore, although SAPO and PostBank are currently distributing social grants, PostBank Chairperson, PhumzoNoxaka, has admitted that attempts are being made to abandon the Integrated Grant Payment System (IGPS) being used now, in favour of a solution costing four times as much, which fails to meet the contract’s five-year build, operate and transfer (BOT) objective.

The current grant distribution contract is profitable for government and ensures that the fee paid for the service remains within the economy of the state – either with SAPO, Postbank or the Department of Social Development (DSD). Any moves aimed at overturning the current system will likely cost hundreds of millions more, with every cent spent so far rendered fruitless and wasteful.

More worrying still is the fact that PostBank’s Corporate Plan (CP) for 2020 includes targets related to a lending portfolio, starting at R262 million and growing to R2 billion by 2022. This is in clear contravention of the South African Reserve Bank’s (SARB) conditional approval for establishing a commercial bank. It is claimed that Noxaka, insisted that this be included in the CP, which could jeopardise the PostBank’s commercial licence application.

The SAPO and PostBank remain the only lifeline for many South Africans, especially in rural areas. It is therefore essential that the patterns of bad governance at other SOE’s not be allowed to take hold at either of these entities.

Parliament’s oversight role through the Portfolio Committee of CDT must be brought to bear immediately, given the evidence of irregularities on these SOE’s, to ensure good governance is applied, in order to guarantee their future stability and sustainability.

Issued by Cameron MacKenzieDA Shadow Deputy Minister of Communications and Digital Technologies, 24 February 2020