The National Student Financial Aid Scheme (NSFAS) plans to challenge a recent ruling from the Western Cape High Court regarding the Department of Higher Education and Training’s effort to exit a controversial contract.
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This contract awarded eZaga, along with three other companies – Coinvest Africa, Tenet Technology, and Norraco Corporation – the responsibility for direct payments to university and TVET college students for five years starting July 2022.
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When NSFAS sought to terminate the contract, eZaga filed an urgent application in court, leading to a favourable ruling for the company on Monday, 15 July.
NSFAS spokesperson Ishmael Mnisi commented that the judgement was ‘limited to the circumstances surrounding’ NSFAS’s actions following a report by Werksmans Attorneys and advocate Tembeka Ngcukaitobi, SC, which found the tender was awarded irregularly.
Mnisi stated, ‘The judgment aims to restore eZaga’s contractual position with NSFAS. However, it did not consider the validity of the tender award on which the contract is based. The Special Investigating Unit and NSFAS’s application to nullify the contract is currently pending at the Special Tribunal.’
EZaga’s court request included preventing NSFAS from allowing universities and TVETs to distribute payments and implementing a payment system to directly transfer funds to students’ accounts.
One significant irregularity in the tender process involved former NSFAS CEO Andile Nongogo’s connections to Coinvest Africa.
Nongogo was dismissed late last year following the investigations by Werksmans and Ngcukaitobi, which recommended terminating the contracts of the four companies.
eZaga argued that NSFAS’s decision to cancel the contract constituted ‘unconstitutional self-help’ and overlooked the legally binding nature of the agreement. This led to the court ruling against NSFAS.
There were disputes regarding whether former NSFAS chairperson Ernest Khosa informed the four companies that their contracts were terminated due to non-compliance with supply chain management policies. Despite this, NSFAS issued a circular earlier this year stating the companies would continue to distribute funds to students, which upset Ngcukaitobi.
On 24 April, NSFAS decided to stop using the service providers, and in late May, the SIU and NSFAS approached the Special Tribunal to interdict the agreements with the four companies.
Last April, the SIU revealed that over 40 000 ineligible students had received NSFAS funds totaling R5 billion before the direct payment tender was implemented.
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Picture: OJ Koloti / Gallo Images