The Organisation Undoing Tax Abuse (Outa) has welcomed the transport minister’s recent decision to dissolve the Road Accident Fund (RAF) board.
Last week, Minister of Transport Barbara Creecy announced she was taking decisive action by dissolving the board of directors at the RAF, citing ongoing governance and operational failings that have severely impacted the entity’s ability to fulfil its legislative responsibilities.
In an official statement released by the Department of Transport (DoT), Creecy highlighted a pattern of issues at the RAF, which were confiremd through internal oversight and regulatory engagements.
The report identified five main issues, starting with the RAF’s protracted and costly litigation pursuits, which have deepened the entity’s long-standing financial problems.
It also identified the RAF’s “inconsistently and, at times, reckless handling of the suspension of CEO Collins Letsoalo, which attracted legal challenges and institutional uncertainty.”
Another concern is the group’s frequent incurrence of default judgements, exacerbating its financial unsustaniability.
Deep divisions within the board itself were also made evident by the fact that most resolutions were passed via casting votes rather than consensus, indicating a lack of cohesion on critical decision-making processes.
The board also failed to fill at least two critical executive positions – the Chief Claims Officer and Head of Legal – which are deemed essential to the mandate of the RAF.
As a result of these concerns, Creecy has dissolved the board and approached the National Treasury for assistance to establish an interim functionary that will act as the accounting authority for the RAF in accordance with the Public Finance Management Act.
The interim group is meant to stabilize the situation until a more permanent solution is ready.
Outa applauded the decision to scrap the current RAF board, citing it as the latest in a string of accountability measures undertaken by the DoT.
RAF CEO Collins Letsoalo was suspended in June along with a number of other high-level suspensions and interventions targeted at entities under the DoT’s portfolio.
“The board failed to challenge irregular conduct and allowed serious issues to fester – including the suspension of other senior staff without due process, which appeared aimed at silencing internal dissent,” said Outa.
The organization called on the minister to appoint a new board with the political will to reform the failing RAF and investigate misconduct under the previous leadership.
Accountability in the transport sector
The minister’s decision to dissolve the RAF board follows the recent announcement that the DoT plans to scrap the controversial contract for the acquisition of South Africa’s new driver’s licence card printer.
Earlier this month, the DoT revealed that it had filed papers with the Pretoria High Court, requesting it to set aside the tender awarded to the French company Idemia to procure the nation’s new printer.
The papers also requested the court to re-issue the tender process and allow the Department of Home Affairs to print driver’s licence cards – something it is capable of doing as it already prints South Africa’s smart ID cards.
All of this is in response to the tender that was awarded to Idemia last year.
The appointment proved controversial, as industry watchdogs flagged multiple areas of concern that pointed towards interference in the procurement process.
Creecy responded by appointing the Auditor-General of South Africa to investigate the matter, whereupon it was confirmed that there were several irregularities in the tender process.
The audit found that Idemia had “failed to meet key bid technical requirements”, with AGSA citing non-compliance within the prescribed procurement processes due to inadequate budget analysis, inconsistent application scoring, and failure to evaluate bids correctly.
As a result, the licence card printer procurement was delayed, leaving the country with a single unreliable machine and an extensive licence card backlog.
To solve this problem, Creecy recently announced in the budget vote speech for the 2025/26 financial year that the department had signed a deal with Government Printing Works (GPW) to print licence cards.
“To ensure we have a backup solution, we have signed a Memorandum of Understanding with the Government Printing Works,” she said.
“We expect that this backup solution will be able to print driver’s licence cards within three months.”
Loading ...
