Net1 Receives Final Decision From SASSA
November 03 2008 - 3:01PM
Marketwired
Net 1 UEPS Technologies Inc. (NASDAQ: UEPS)(JSE: NT1) ("Net1" or
the "Company") today announced that it has received the final
decision in respect of the Payment Service Tender from the Chief
Executive Officer ("CEO") of the South African Social Security
Agency ("SASSA"). Bidders have been advised that the CEO has
decided to:
- make no award of tenders submitted in response to SASSA Tender
19/06/BS and to terminate the procurement process; and
- defer a decision about commencing a fresh tender process for
the provision of a social assistance grants payment service.
The reasons for the decision of the CEO are summarized as
follows:
1. a number of the bid evaluation technical criteria specified
in the Request for Proposal ("RFP") are vaguely formulated and
resulted in a high degree of subjectivity in the decision making
process and inconsistent scoring of bids;
2. uncertainty and ambiguity of the RFP regarding payment
solutions based on multiple payment channels resulted in an unfair
and uncompetitive bidding process;
3. the important objectives of the procurement process relating
to submission of performance guarantees by bidders could not be
achieved;
4. due to the lack of clarity in the RFP regarding the
measurement of preference points, an important objective of the
RFP, namely the advancement of broad-based black economic
empowerment, could not be achieved;
5. evaluating and adjudicating the payment service tender,
notwithstanding the serious flaws identified in the RFP and bid
evaluation process, would be inconsistent with the application of a
fair, transparent, equitable, cost-effective and competitive
procurement system and would expose the SASSA to a significant
degree of legal risk;
6. a decision by SASSA on whether or not to commence a fresh
tender process will require further consultation and consideration
of various important factors, including the terms, evaluation
criteria and specifications for a new tender, the envisaged payment
solution and conditions for the acceptability and evaluation of
bids which may be based on alternative payment models.
"Due to the protracted process that SASSA undertook, this
outcome is not in any way surprising," said Dr. Serge Belamant,
Chairman and CEO of Net1. "We will continue with our high-quality
service offering to SASSA and focus on developing our international
market opportunities. The outcome of the SASSA tender process
clarifies our operating margin expectation for the duration of our
current contracts, which may well be extended," he concluded.
About Net1 (www.net1ueps.com)
Net1 provides its universal electronic payment system ("UEPS"),
as an alternative payment system for the unbanked and under-banked
populations of developing economies. The company believes that it
is the first company worldwide to implement a system that can
enable the estimated four billion people who generally have limited
or no access to a bank account to enter affordably into electronic
transactions with each other, government agencies, employers,
merchants and other financial service providers. To accomplish
this, Net1 has developed and deployed the UEPS. This system uses
secure smart cards that operate in real-time but offline, unlike
traditional payment systems offered by major banking institutions
that require immediate access through a communications network to a
centralized computer. This offline capability means that users of
Net1's system can enter into transactions at any time with other
cardholders in even the most remote areas so long as a portable
offline smart card reader is available. In addition to payments and
purchases, Net1's system can be used for banking, health care
management, international money transfers, voting and
identification.
Net1 also focuses on the development and provision of secure
transaction technology, solutions and services. Its core
competencies around secure online transaction processing,
cryptography and integrated circuit card (chip/smart card)
technologies are principally applied to electronic commerce
transactions in the telecommunications, banking, retail, petroleum
and utilities market sectors. These technologies form the
cornerstones of the "trusted transactions" environment of Prism, a
South African based subsidiary of the company, and provide the
Company with the building blocks for developing secure end-to-end
payment solutions.
Net1 recently acquired 80.1% of BGS Smartcard System AG ("BGS"),
an Austrian company, whose core business consists of developing and
integrating smart card-based offline and online financial
transaction systems. Since 1993, BGS has implemented tailor-made
smart card-based payment solutions, focusing on emerging economies
and in cooperation with banks, enterprises and government
authorities. BGS is headquartered in Vienna, Austria, and has
subsidiaries in India and Russia, and a branch office in the
Ukraine. Distributors are located in Asia, Central and South
America, the Commonwealth of Independent States and the Middle
East.
Forward-Looking Statements
This announcement contains forward-looking statements that
involve known and unknown risks and uncertainties. A discussion of
various factors that could cause the Company's actual results,
levels of activity, performance or achievements to differ
materially from those expressed in such forward-looking statements
are included in the Company's filings with the Securities and
Exchange Commission including the risk factor entitled "The South
African Social Security Agency, or SASSA, is in the process of
conducting a national tender for the distribution of welfare grants
in which bidders had the opportunity to bid for all of South Africa
or on a province-by-province basis. If we were not to receive
contracts to continue to distribute these grants in each of the
provinces where we currently distribute them, or if we do win these
contracts, but the terms are not as favorable to us as our current
contracts, our financial condition, results of operations and cash
flows would be materially and adversely affected," contained in our
Annual Report on Form 10-K for the year ended June 30, 2008. The
Company undertakes no obligation to revise any of these statements
to reflect future circumstances or the occurrence of unanticipated
events.
NET 1 U.E.P.S. TECHNOLOGIES INC.
4th Floor, North Wing,
President Place, Cnr. Jan Smuts Avenue and Bolton Road
Rosebank, Johannesburg, South Africa
TEL: 011-27-11-343-2000 FAX: 011-27-11-880-7080
Contacts: Net 1 UEPS Technologies Inc. William Espley Investor
Relations (604) 484-8750 or Toll Free: 1-866-412-NET1 (6381)
Website: www.net1ueps.com
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