Road Accident fund: total liabilities exceed its total assets by R46.395m

The Greater Cape Town Civic Alliance (GCTCA) notes with deep concern that Auditor General Mr Terence Nombembe (AG) has cast doubt on the Road Accident Fund’s (RAF) ability to operate as a going concern. (“Road Accident Fund in financial straits” – 12 Sep 2012)

The AG’s report that the RAF has incurred a net loss of R16.487m during the year ended 31 March 2012 and, as of that date, the entity’s total liabilities exceed its total assets by 46.395m is made worse by his citing a lack of internal controls to curb the wasting of taxpayer money. The RAF has been in the newspapers for quite awhile regarding its financial difficulties, and it is shocking that no internal controls have been put in place to stop the wastage of public funds.

The news does not get any better for taxpayers as the fund recorded a further massive deficit of R16.5bn in the financial year ended 31 March 2012 from a net deficit of R1.5bn in the previous year. This sad state of affairs is compounded by outstanding RAF claims of R34bn jumping to a staggering R54bn. No doubt, as the AG is sceptical in the RAF’s ability to operate, taxpayers will most likely have to carry this astronomical cost.

The claim amount itself shows the damage road accidents have on the fiscus and the taxpayer, which amounts to about half of the Passenger Rail Association of South Africa’s (PRASA) estimate to recapitalise Metro rail with a new rail fleet. (PRASA notice – 19 April 2012)

The GCTCA thus encourages and supports recently appointed RAF, CEO Mr Eugene Watson’s call for legislative changes to ensure that inefficiencies in the current RAF compensation system are minimised and contained, together with the speedier roll out of an efficient, and safe public transport system.

Reference:

Road Accident Fund in financial straits (Sapa – “Road Accident Fund in financial straits” – 12 Sep 2012) http://www.fin24.com/Economy/Road-Accident-Fund-in-financial-straits-20120912

Remarks by the Minister of Transport, Mr. Sibusiso Ndebele (MP), On the Occasion of the Launch of the Request for Proposals For the Rolling Stock Fleet Renewal Programme, Braamfontein, Johannesburg, South Africa (PRASA notice – 19 April 2012)>> http://www.prasa.com/Speech20120419.aspx

Leave a Reply