HEAD OFFICE Protoria Private Bag X55662 ‘Arcadia, Pretoria, 0083 Ww SasSsa Tet (012) 4002455 Enguiio: Me Abraham Mahlangu Mr Mark Bames. Chief Executive Officer The South African Post Office Block A | First Floor | Eco Point Building; 350 Witch Hazel Ave | Eco Park Estate | Centurion 0058 Telephone: 012 649 6839 / 082 6774864 Dear Mr Barnes COLLABORATION BETWEEN THE SOUTH AFRICAN SOCIAL SECURITY AGENCY (SASSA) AND THE SOUTH AFRICAN POST OFFICE (SAPO) 1. The letter serves to confirm the South African Social Security Agency (SASSA)'s intention to appoint the South African Post Office (SAPO) as a Service Aggregator to pay social grants on a Build Operate and Transfer (BOT) Model over a period not exceeding five years. The BOT shall entail a process whereby SAPO and SASSA will be working together to develop and implement an Integrated Grants Payment Solution that will at the end of the contract be handed over to SASSA who would have built enough capacity to be a fully-fledged Paymaster. The Build Operate and Transfer model will only be a collaboration between SAPO and SASSA. ‘The decision to appoint SAPO as a Solution Integrator! Service Aggregator (SI/SA) and for the BOT was on the strength of its submission to the Constitutional Court in the Black Sash matter as well as its presentation to the Standing Committee on Public Accounts (SCOPA). Furthermore, a number of interactions took place between the two parties, and subsequently the last meeting being on 17 May 2017, at Cape Town, where SAPO convinced SASSA that it has the capability to execute task of paying social grants. It must, however, be understood that the appointment of SAPO as a SI/ SA does not mean that SAPO is taking over the payment function permanently, as the administration, _ management and payment of social assistance is the responsibilty of SASSA in line with the South African Social Security Agency Act (SASSA Act), 2004, The intent is for SAPO to build the system with the involvement ‘of SASSA from inception to completion and operate it to stabilise it and then transfer the whole payment process back to SASSA once it has built SASSA House, Prodinsa Building, Chr. Protorius and Steve Biko Streets,ration is a transitional arrangement in accordance with ‘Airica (RSA) as well as section ct 13 of 2005) (IGRFA), which basis for any state canecity to take over. The collabor ‘Secton 236(b) of the Constitution of the Republic of South ) of the Intergovernmental Relations Framework Act, (Ac provides for the performance of any function on a delegated or agency ined deviation and support from National Treasury (NT) to enter into an ih SAPO on a Government to Government collaboration for @ period not Sxceang five years. NT approved the deviation on condition that SASSA amends its Srocurement plan to include timelines, and that the financial proposal from SAPO be Soosicered by the bid committee. (A copy of the letter from NT is attached). ASSA will submit its documented requirements (Terms of Reference) for SAPO to indicate: which of the services itis able to render, provide timelines for those services and costed sponse thereto. SAPO should carry the budget for the first year of the project. A due ‘gence process will also be undertaken to ascertain SAPO's capabilities. | have instructed 4SSA's Chief Information Officer (CIO), Mr Abraham Mahlangu, to work with the SAPO'S vm to establish the War Room to ensure prompt implementation of the project. | would lke to take this opportunity to thank SAPO for its willingness to work with SASSA under these pressing conditions. I believe that SAPO's investment in this BOT project will not only benefit SASSA’s beneficiaries, but will also benefit all the people of South Africa especially those in rural areas. SASSA is ready to work with SAPO to ensure the successful implementation of the project in the best interest of the country. Mr Thokozani Magwaza Chief Executive Officer Be /44/07 20°]