The South African Post Office has denied reports that it is losing millions of Rands in delivery fees for paying out social grants.
A weekend newspaper reported that the Post Office was losing at least R60 million a month from distributing social grants to millions of citizens.
It said the situation is so dire that the Post Office is considering shutting down many cash paypoints around the country.
However, the Acting Chief Executive Officer of the Post office, Ivumile Nongogo, says the article was written out of context and the situation is not as dire.
“As a standalone contract, it’s actually quite a lucrative contract. We’re making money. Certainly, the costs are quite high and I think all the parties in the contract understand that. The idea of moving money to all sorts of places across the country is expensive and it’s a scale that is quite unprecedented. But as a contract, it is a contract that makes money for the post office group.”
Watch video of the post office administering social grant payments after taking over from CPS:
The Post Office took over social grants payment in late 2018 from Cash Paymaster Services (CPS) after the Constitutional Court declared the contract between SASSA and CPAS invalid and that it should end in September 2018.
This was followed by a matter brought before the Pretoria High Court by Corruption Watch concerning an unlawful payment of R316 million from SASSA to CPS.
The Pretoria High Court ruled that CPS should repay the R316 million back to SASSA. The ruling was upheld by the Supreme Court of Appeal and the Constitutional Court.