The South African Portfolio Committee on Transport has expressed significant concerns regarding the liquidity challenges besetting the Road Accident Fund (RAF), Cape {town} Etc reports.
Committee Chairperson Donald Selamolela articulated these worries during a recent briefing led by Minister Creecy, which included various departmental entities such as SANRAL and ACSA.
The session aimed to provide insights into the annual audit and performance plans as the Parliament budget review process unfolds.
Chairperson Selamolela emphasised the need for robust financial reform, acknowledging the assurance that the department is actively exploring sustainable funding models for the RAF.
‘We appreciate the progress, and we strongly believe that the appointment of a new permanent CEO will assist the RAF. We hope the entity will transition and become financially stable,’ he stated.
Alarming revelations during the briefing revealed that the RAF pays out a staggering R25 billion monthly while only receiving R4 billion in revenues.
This untenable imbalance raises grave concerns about the organisation’s long-term viability and ability to address ongoing claims. As a result, claims are not only delayed, but the fund’s cycle of payments appears increasingly jeopardised.
Minister Creecy confirmed that the RAF is shifting its strategies, with a focus on mitigating its reliance on the fuel levy – a primary source of income increasingly threatened by the rise of electric vehicles.
She maintained the commitment to establish a no-fault system for claims, which promises to eliminate the need for costly litigation and expedite compensation for victims of road accidents. ‘The intention is to streamline the process and deliver justice without the burden of lengthy disputes over liability,’ she noted.
Selamolela expressed concern about the irregular expenditure cited within the RAF’s financial reports, pledging the committee’s support in navigating these challenges. ‘We are going to support the entity and walk this journey together, especially as it addresses the challenges it faces,’ he remarked, indicating a collaborative effort to restore stability and public trust in the organisation.
In a significant move towards transparency and financial management, the RAF Board has decided to comply with the government-wide acceptable GAAP 19 accounting standard.
In a further commitment to accountability, the RAF has withdrawn from costly litigation against the Auditor-General’s office, signalling an intent to focus resources on its core functions.
The committee was assured that several interventions are underway, with hopeful anticipation that tangible improvements will emerge in the coming years.
Transport and accident compensation stakeholders will be keenly watching the RAF’s strategic pivots as they aim to secure a more sustainable future for the vital service it provides to South African road users.
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Picture: Road Accident Fund / Facebook
