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Road Accident Fund mess continues

In terms of its annual report tabled before Parliament recently the Road Accident Fund (RAF) remains technically bankrupt according to its CEO, Eugene Watson who was appointed to the post recently.

“The Road Accident Fund incurred a net loss of R16.487m during the year ended March 2012 and, as of that date, the entity’s total liabilities exceed its total assets by R46.395m”, he told parliamentarians.

In a separate report but incorporated into the presentation, the auditor general’s remarks were highlighted where it was stated that the financial position cast doubts on the RAF to operate as a going concern and there still be a lack of controls to curb the wastage of unnecessary expenditure.

Watson said funding models were being considered as an alternative, including funding from the road levy. Both funding and the approach to claims had to be re-considered, he said.

“The fund recorded a deficit of R16.5 billion in the financial year under review compared to a net deficit of R1.5bn in the previous year,” said Watson and this was as a result, he said, in provisions having to be made for outstanding claims. The figures he presented showed an increase from 2010/11 of R34bn to 2011/12 at R54bn.

The report highlights the fact that thousands of claimants have outstanding compensation cases and many involve claims serious injuries. Some of the claims have been outstanding for a number of years.

“Government need to consider interim legislative measures to ensure that inefficiencies in the current compensation system, which we cannot control, are contained”, he told the committee parliamentarians.

 

Posted in Finance, economic, Justice, constitutional, Public utilities, Trade & Industry, Transport0 Comments


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