The state-owned Road Accident Fund (RAF) is wasting the public’s money. And its funding and management model must be urgently reviewed.
This fund is financed mainly from fuel levies – paid by South African consumers.
Yet the RAF’s recently released 2011/2012 Annual Report is testament to its failure to manage this money well.
The RAF incurred a net loss of R16.6 billion.
The entity only achieved 53% of the targets that it set for itself.
The entity’s debts continue to grow. In the previous financial year, debts grew by R1.6 billion to approximately R42.5 billion. The 2012 report shows that debt is now at R46 billion.
R22.1 million was lost through wasteful and fruitless expenditure and the Auditor General noted that the fund’s management did not take appropriate steps to prevent and detect fruitless and wasteful expenditure.
The fund has a massive claims backlog that has not decreased in the last financial year. It currently has 253 111 outstanding claims.
The RAF currently has a goal to reach solvency by 2020. Without serious intervention its debts are however, likely to continue ballooning and distracting the entity from its mandate to support and compensate the victims of road accidents.
Indeed in this context, the massive R4.7 million performance bonus paid to the outgoing RAF CEO, Jacob Modise, was surely not warranted.
An urgent review of this fund and its funding model must be undertaken by Transport Minister Ben Martins and his new plan for road accident victims must be brought to Parliament instead of being endlessly delayed by both Cabinet and the Department of Transport.
The DA will be raising these matters in the Transport committee when the RAF Annual Report is presented for discussion and will call on RAF CEO, Dr Eugene Watson, to brief the Transport Portfolio committee on the steps they intend to take to turn around this dire situation.