Road Accident Fund on downward slope
The Road Accident Fund is a vital institution that is meant to provide compulsory insurance cover against injury or death caused by accidents to all users of South African roads.
Given the number of road accidents and deaths in this country, it is not an institution that one should have to do without. But the cost to the country is becoming too much. The mismanaged RAF collects its funds through a R1.93 levy on every litre of fuel bought.
Motorists, already praying a premium for their diesel or petrol, are rightly furious about the hefty levy. But, as the levies go up, so do the fund’s losses. It suffered an almost R35-billion loss last year despite collecting some R33billion in revenue.
Most would not begrudge the money if it was used sustainably for that for which it was collected.
Instead, the RAF has become notorious for its inability to manage its administration or its money.
Crooked lawyers, often working in concert with those employed by the RAF, fleece the institution.
Meanwhile those with legitimate claims have to wait. Even worse, the RAF tends to litigate rather than pay out. Their motivation may be to delay having to pay from empty coffers, but this inevitably has the long-term effect of significantly pushing up costs.
The RAF’s legal bill reportedly grew from some R2.3billion in 2008 to R8-billion last year.
People with judgments against the RAF have often had to resort to seizing and selling off the tardy fund’s assets to collect on the debts owed. It currently reportedly owes some R8-billion.
The fund’s answer is not to improve its administration or work more vigilantly against the corruption which diminishes its coffers. It instead resorts to renting its office furniture at a monthly cost that could have bought up the contents of several furniture warehouses. The thinking is that if they don’t own any assets, creditors cannot seize them.
Sister newspaper, the Sunday Times exposed that the RAF currently rents 300 office chairs at a monthly cost of R1 666 a chair.
That is some R500 000 it pays per month for its employees to be seated. This contract never went out to tender.
The RAF reportedly tried to push through an even more audacious furniture rental contract for some R60-million.
Last month then acting RAF chief executive Lindelwa Jabavu promised that the RAF would transform from an institution perceived as incompetent, uncaring and wasteful into one driven by a pursuit of excellence in service delivery, which would make a difference in the lives of those affected by road accidents.
We seem a long way off that ambitious mark. Instead, we continue to pay dearly for its failures and inefficiencies.
The RAF’s leadership needs to get their bottoms out of their absurdly expensive office chairs and into gear. The RAF cannot continue to be allowed to follow on this downward trajectory.
It may well be time for an imaginative and holistic rethink of the RAF.