VFS Global, a worldwide
outsourcing and technology
services specialist for diplomatic
missions and governments, has
come under scrutiny over allegations
of abusive market dominance and
unlawful tender procedures, resulting in
excessive visa application prices and
hidden fees.
A spokesperson for the Competition
Commission told TNW it was
investigating allegations of abuse
of dominance against VFS, in the
visa support services market.
At the time of going to print, the
Commission was expected to submit
its recommendations on whether
action should be taken against the visa
service company in coming days.
VFS Global has 100% market share
in visa assistance for Spain, Canada,
Denmark, Austria, New Zealand,
Greece, and Sweden. In principle,
applicants should be able to go to the
High Commission to apply for visas but
often this is discouraged and clients
are redirected to VFS.
Jaco Badenhorst, md of Visa
Request, brought the initial complaint
to the Competition Commission. He
told TNW the market dominance VFS
Global had created in several visa
markets had led to excessive visa
application prices with hidden fees
as well as abominable service levels.
For example, for Canada VFS charges
a R1 040 service fee whereas other
visa companies charge R250, he
says. Clients are also often made
to wait for several hours at the VFS
offices, adhering to “ludicrous” security
measures, such as the prohibition of
use of electronic devices, but they don’t
dare to speak up because VFS is their
only way to obtain a visa, Jaco added.
Creating healthy competition in the
market is the best way to counteract
bad service and high fees, Jaco
says. He says Australia used to work
exclusively with VFS. The embassy
opened up the service to a few other
companies, resulting in much better
service and considerably lower prices.
Inge Beadle, manager of Corporate
Travel Services, says it’s not unusual
for clients to be asked to go to the VFS
offices more than once, despite having
all the required documentation. They
are then asked to pay a cash fee for
second or third visits.
Spokesperson for VFS Global,
Rustom Dhanbhoora, denies that VFS
has created a monopolistic situation,
and says that service fees are not
unjustifiably high. “Service fees levied
by VFS Global are approved by the
client governments and form part of
the tendering procedure. The level of
fee is based on various parameters as
stipulated in the tender requirement
and the country of operation,” he says.
VFS Global has also come under
scrutiny following the tender process
through which it became the sole
service provider to receive and manage
SA’s visa applications for inbound
travellers.
Haniff Hoosen, the DA Shadow
Minister of Home Affairs, said in
a statement that he had
requested an investigation
into an estimated R1bn visa
facilitation tender awarded
to VFS Visa Processing to
determine whether the tender
was awarded unlawfully. The
DA is also concerned that a
staff member left the DHA
to work for the company that
appears to have improperly
benefited from the tender.
“The timing surrounding
the introduction of new visa
regulations and the awarding
of the tender to VFS seems
very convenient. This new
information raises questions
about Minister Gigaba’s
claims that these regulations
are in the interest of security,”
Haniff said.
He said the awarding of the
tender to VFS could leave
thousands of South Africans,
who are working for private
visa facilitation companies,
unemployed. “It is ironic that
this tender was awarded to an
international company while
the new visa regulations were
intended to protect the SA
economy and job market.”
Rustom said the tender by
the DHA for opening Visa and
Permit Facilitation Centres
in South Africa was open
for bidding by any company.
“Governments adopt an open
tendering process that requires
bidders to offer a robust and
cost-effective solution in line
with the requirements of these
governments.”
