RAF claims: govt needs R17 billion to make payments

The Road Accident Fund (RAF) is looking to secure a “finance facility” to pay R17 billion in unpaid claims – some that have been outstanding for more than five years.

Transport Minister Fikile Mbalula revealed this in reply to a written parliamentary question from Economic Freedom Fighters MP Nontando Nolutshungu, who wanted details on when the RAF envisaged the backlog would be cleared.

“The revenue received by the RAF from the fuel levy is insufficient to address its claims liability. Consequently, one of the plans included in the RAF’s strategic plan and annual performance plan, which is specifically aimed at addressing the unpaid claims debt, is for the RAF to secure a finance facility for this short-term debt and the securing of the finance facility to clear the backlog is targeted for the 2020-21 financial year,” Mbalula said.

Previously, Mbalula said, as of 31 March, the RAF liability grew to R324 billion and claims valued at R17.2 billion had been finalised, but could not be paid due to financial cash flow challenges.

He said the cause of the liability was the increasing number of claims and administrative costs.

Approximately 102 086 new claims were registered during 2019-2020.

Mbalula said the RAF received 297 610 claims in the past three years.

He said 151 530 of the claims received were, or are being, challenged and 45 075 of the challenged claims were settled by way of a court order.

Mbalula said the exact number of the matters which went on trial could not be ascertained.

“However, it is important to mention that a study conducted by Professor Hennie Klopper on the RAF matters set down on the court roll in the High Court in Pretoria, revealed that 99.56% of the matters are settled at the doorstep of court and less than 1% proceed to trial.

“This study was done in a court which has the highest number of litigated matters countrywide,” Mbalula said.

He said although the research focused on Pretoria, the RAF’s observation was that this was reflective of the general trend in all the courts across the country.

“RAF matters get settled by both parties and the settlement agreements are then made orders of court,” he said.

According the RAF’s 20192020 annual performance plan, financial challenges had placed strain on the fund’s ability to carry out its mandate.

The balance of claims creditors (claims requested, but not yet paid) as at 31 March 2018, was R9 billion.

“Claims creditors are projected to grow to R11 billion by the end of the current financial year. Over the medium term expenditure framework period, the RAF fuel levy is projected to remain flat and, as a result, claims creditors are projected to grow to R41.4 billion by the end of the 2021-22 financial year,” the report read.