Alternative payment systems company, Net1 UEPS Technologies (Net1) has stated that it is "analysing the situation" relating to the tender deal to distribute social grants to South Africans.

In 2012 the South African Social Security Agency (Sassa) awarded a tender valued at R10 billion to Cash Paymaster Services (CPS), a division of Net1, to distribute social grants to 15 million South Africans over a five year period.

However, last year it was alleged that Net1 had breached the South Africa's National Credit Act, and that the deal conducted with Sassa was "irregular". The South African Constitutional Court ruled that Sassa needed to re-issue the tender.

Towards the end of last year Sassa initiated a new tender process for a five-year contract relating to the payment of social grants and issued an initial Request for Proposal ("RFP"), according to a statement.

"Following a detailed analysis of the tender specifications, we concluded that the tender specifications were not sufficiently clear regarding a number of critical points and failed to comply with the RFP requirements specified in the court's ruling and, in November 2014, we applied to the Court for an order setting aside the RFP and directing SASSA to issue a corrected RFP," notes Net1.

The company is currently analysing the RFP to determine whether it is in the best interest to participate in the tender process or to focus on our other financial services businesses without being a contractor to Sassa, Net1 said in a statement.

"We have not yet made a final determination but expect to do so by the tender deadline."

"In any event, we cannot predict what the timing or ultimate outcome of the tender process will be, or if a new tender award will be made at all after the process is complete," reads the statement.

Also commenting Dr Serge Belamant, chairman and chief executive officer of Net1 said, "I continue to be very positive about the future of our group as we continue to diversify our business activities to minimise the risks that are intrinsic in customer concentration, government contracts and localised business conditions."

Net1 is listed both on the Johannesburg Stock Exchange (JSE) and New York's NASDAQ.

In South African Net1's transaction processing segment consists mainly of pension and welfare benefit distribution services provided to the government, and transaction processing for retailers, utilities, medical-related claim service customers and banks.