R600-million a year. This is how much it costs on security alone to try to keep pension pay-points safe from armed robbers.

NET1 UEPS Technologies — which owns Cash Paymaster Services (CPS)‚ which is responsible for paying 22-million grants to 10.6-million recipients across the country — revealed the figure during a trip to one of the pay-points in the Eastern Cape.

Newly-appointed Net1 CEO Herman Kotze told TimesLIVE during the company’s charm-offensive media junket in Bizana last week that security at pension pay-points was the “single biggest expense” of CPS’s operating costs. The company has outsourced its security function to Fidelity‚ which has specialised vehicles to carry cash to pension pay-points.

“We have put a lot into security. It’s probably our single biggest expense if you look at CPS’s operating costs‚” said Kotze.

Net1’s chief operations officer‚ Nanda Pillay‚ said an assessment was done monthly‚ in consultation with the police‚ to determine the requirements of each pension pay-point.

“We engage with the SA Police Services and we build the security plan around that. In some instances there are four or five armed guards. Where we think the risk is high we increase it. Where we think the risk is even higher we have helicopters circling‚” he said.

But Pillay said the company was concerned about creating a tit-for-tat situation‚ where additional security with more fire power is met by armed robbers who have beefed up their own fire power in response. This would‚ he said‚ “put people’s lives at risk“.

“It’s something that we really don’t want to do. So the only way to do it is to manage the cash on the pay-point at a point in time. But I can’t go into details on that. What we really do is that we schedule the money and its delivery at different times so that there is not that much money on the site and so it does not make it attractive‚” said Pillay.

He said armed robberies have decreased dramatically over the last two years at pension pay-points because of increased security.

“We are probably talking in the vicinity of R700-million in security‚ vehicles‚ firearms‚ depot infrastructure. So it’s quite capital intensive‚” he said.

Pension recipients have often become victims of pay-point robberies which have even left some injured.

Last week Net1 flew 20 journalists from Lanseria to Kokstad in KwaZulu-Natal in a bid to clean its image after months of controversy relating to the 2012 tender for grant payments which was ruled invalid by the Constitutional Court.

Despite the Constitutional Court ordering the government to take over the grant payments by April‚ Social Development Minister Bathabile Dlamini supported Net1 to continue paying recipients.

Fearing that grants might not be paid in May‚ the Constitutional Court allowed Net1 at the last minute to continue with the invalid contract to pay recipients for another year.