Gauteng's ‘debt collector' move against the RAF and Compensation Fund
Province also 'not necessarily' expecting an adverse AG audit opinion because of its commitment to pay R4.1bn for GFIP maintenance backlog.
The province is looking into other income streams to pay the e-toll debt and GFIP maintenance backlog, including liquor licences, gambling taxes, and advertising. Picture: Moneyweb
The Gauteng provincial government is appointing 'debt collectors' to put systems in place to ensure the payment of the medical costs of road accident victims and injured workers at public hospitals in the province by the Road Accident Fund (RAF) and the Compensation Fund.
'Unfortunately, for the last few years, because of inefficient systems, we have not been collecting that money,' said Gauteng MEC for Finance and Economic Development Lebogang Maile on Monday.
'It's a lot of money. We need it for our revenue,' he said.
Maile said last year that the RAF claims alone amount to about R10 billion.
ALSO READ: Gauteng aims to use RAF medical expenses claims to pay e-toll debt
Province has not started paying e-toll maintenance bill
Maile further said he does 'not necessarily' expect an adverse audit opinion from the Auditor-General (AG) because of the province's commitment to pay R4.1 billion for maintenance backlogs on the Gauteng Freeway Improvement Project (GFIP), which is not owned by the province but is a South African National Roads Agency (Sanral) asset.
Maile confirmed to Moneyweb in October 2024 that the proceeds of the RAF public hospital claims are one of the income streams to pay for the province's almost R20 billion e-toll-related debt and GFIP road maintenance financial commitments.
He said on Monday that the Gauteng government has not yet paid any of the R4.1 billion it committed to pay towards the GFIP maintenance backlog because the province is still engaged in 'a process' with National Treasury about this payment.
Maile said once that process is concluded, the province will be able to explain to the public that it is 'on course in ensuring that we meet our commitments'.
ALSO READ: R25.5 billion deficit over five years — Can RAF afford to pay out claims?
His comment about not making any payments yet towards the R4.1 billion GFIP maintenance backlog is at odds with statements made in September 2024.
Maile said then that the provincial government is starting the process of servicing the historical e-toll debt of R12.9 billion in five equal annual instalments at the government's five-year interest rate.
He added at the time that the first instalment the province was paying on 30 September 2024 amounted to R3.8 billion, consisting of R3.2 billion in historical debt and the maintenance portion of R546 million.
In terms of the memorandum of agreement signed between the Gauteng provincial government, National Treasury, the Department of Transport, and Sanral:
Gauteng agreed to pay 30% of Sanral's R43 billion e-toll debt and interest obligations, which amounts to R12.93 billion;
Gauteng further agreed to contribute R4.1 billion to the maintenance backlog on the GFIP; and
National Treasury agreed to cover the remaining 70% of Sanral's e-toll debt and interest obligations.
E-tolls on the GFIP were scrapped effective 11 April 2024 when the connection to the GFIP gantries was disconnected.
ALSO READ: RAF/Discovery judgement: the RAF did not 'win' – experts
MEC doesn't foresee problems with AG audit
Maile said on Monday the province has not yet engaged the AG about its commitment to pay R4.1 billion towards the road maintenance backlog on the GFIP, but this will happen once the process with National Treasury is concluded.
He said he did not necessarily see the payment of R4.1 billion towards assets the province did not own creating problems with the AG's audit, 'because our residents are using these roads'.
'It's not like we just are giving [away] our money. We are paying on behalf of the citizens,' he said.
Organisation Undoing Tax Abuse (Outa) CEO Wayne Duvenage said on Tuesday it does not make sense for Gauteng to pay for maintenance on assets it does not own.
Duvenage said Gauteng has roads that are in its jurisdiction and are its assets, and Johannesburg has its roads, 'and they normally stick to that'.
'Why then don't they [Gauteng] fix City of Joburg and Ekurhuleni potholes while they are about it? There are also Gauteng citizens riding on those roads,' he said.
RAF head of corporate communications McIntosh Polela confirmed last year that claims from the state, including the Gauteng provincial government, are nothing new and 'it is something that has always been happening and is currently ongoing'.
ALSO READ: Compensation Fund missing documents for 25 000 pensioners
Maile said on Monday that the province has not engaged directly with the RAF over the planned claims against the fund and does not anticipate any payment problems when it submits its claims because the law dictates that the RAF and the Compensation Fund must pay.
'All that is required is that person X was there. The onus … the ball is in our court to prove that patient X came through [the hospital] and the RAF must pay,' he said.
Maile said other income streams the province has identified to pay the e-toll debt and GFIP maintenance backlog include liquor licences, gambling taxes, advertising, and the commercialisation of some of the province's buildings and land.
'We have actually started a process now through one of our agencies to call for businesses who have ideas on what revenue streams we can get,' he said.
This article was republished from Moneyweb. Read the original here.
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Daily Maverick
9 hours ago
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IOL News
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Letsoalo has been RAF chief executive since 2020, with his five-year contract due to end on August 6, but the board has resolved to renew his fixed-term contract upon its expiry. Video Player is loading. Play Video Play Unmute Current Time 0:00 / Duration -:- Loaded : 0% Stream Type LIVE Seek to live, currently behind live LIVE Remaining Time - 0:00 This is a modal window. Beginning of dialog window. Escape will cancel and close the window. Text Color White Black Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Background Color Black White Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Transparent Window Color Black White Red Green Blue Yellow Magenta Cyan Transparency Transparent Semi-Transparent Opaque Font Size 50% 75% 100% 125% 150% 175% 200% 300% 400% Text Edge Style None Raised Depressed Uniform Dropshadow Font Family Proportional Sans-Serif Monospace Sans-Serif Proportional Serif Monospace Serif Casual Script Small Caps Reset restore all settings to the default values Done Close Modal Dialog End of dialog window. Advertisement Next Stay Close ✕ In addition to wanting to return to work, he has also asked the high court to ensure that he keeps his security detail. 'As part of my fringe benefits relating to security, I am provided by the first respondent (RAF) with security vehicles and security personnel. There have been threats made to my life during the course of my employment as the chief executive of the RAF. 'The threats come from various sectors, chief among them from the taxi industry. There was a high-risk assessment conducted on me. I have security guards placed at my house,' Letsoalo stated in his founding affidavit. He fears for his safety and that of his family, and he is also entitled to R480,000 a year security. Among the conditions of his suspension is that he return all the RAF property in his possession, including the provision of security. 'There is no doubt that this is a matter of life and death, and I cannot wait any longer and need urgent relief now and not later. A grave injustice will befall me or my family if the urgent relief is not granted, especially when the news of my suspension has been widely circulated in print media, television, and social media,' explained Letsoalo. 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The reason why I was provided with security vehicles was that last year, there was an attempt on my life coming from the taxi industry,' he said. Letsoalo was placed on special leave on May 27, but this was withdrawn on Tuesday, June 3, when he was suspended. He indicated that should his application not be heard urgently, it would be delayed for months, and in that time, his employment contract expires in August, and his potential re-employment with the concurrence of Transport Minister Barbara Creecy and Cabinet's approval would in all probability not happen. 'I disavow any reliance on Section 186(2) of the Labour Relations Act as amended, as I do not claim that my suspension was unfair, hence I do not approach the Commission for Conciliation, Mediation and Arbitration. I do not claim the conduct of the respondents (RAF and its board) constitutes unfair labour practice,' he explained. However, Letsoalo categorically and unambiguously stated that his case is that his suspension was unlawful, irrational, and unreasonable. In the period leading up to his suspension, he described Board Chairperson Lorraine Francis as confrontational, accusing him of changing his tune about attending meeting of the National Assembly's Standing Committee on Public Accounts (Scopa) and indicating that he must take leave to clear his mind and think about issues as he had been under extreme pressure, which she stated was compassionate leave. Letsoalo said he refused to take compassionate leave after Francis stated that the board was worried he was taking instructions from his lawyers and wanted him to choose. 'I felt aggrieved that I had to learn about my suspension during the proceedings of the portfolio committee (Scopa) meeting. While I was watching the proceedings of the portfolio committee, I received an SMS from the chairperson of the board, who did not attend the portfolio committee meeting on the allegation that she was attending a prior personal matter,' he said. Letsoalo added that Francis also told him to check his e-mails and found the letter informing him of his suspension and withdrawing the earlier special leave. The suspension was allegedly due to adverse findings made by the Special Investigating Unit (SIU), which he said has been ongoing since 2022. Letsoalo complained that the SIU never gave him a right of reply before presenting its preliminary findings before Parliament. 'If the board felt so strongly about my alleged refusal to attend the Scopa meeting, why could they not use the reason for my refusal to attend the Scopa meeting as a reason for my special leave?' he asked. 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Eyewitness News
15 hours ago
- Eyewitness News
Transport Ministry mulling possible strategy to put out RAF fires
JOHANNESBURG - The Transport Ministry says it's still mulling possible interventions at the troubled Road Accident Fund (RAF) as a governance crisis persists at the institution. This follows longstanding challenges at the RAF, which has again been thrust into the spotlight by the board's recent decision to suspend Chief Executive Officer (CEO) Collins Letsoalo. RAF has, for long, been plagued with claims of governance failures, financial mismanagement and procurement irregularities. Earlier this week, the RAF rescinded a decision to place Letsoalo on special leave and replaced it with a suspension, citing insubordination. Some members of Parliament (MPs) then called for the board's removal, claiming the move would only create more chaos at an already deeply troubled institution. The transport ministry has now called for a meeting with the RAF board. It says the meeting will evaluate the current board's ability to restore good governance and effective administration at the entity so that it fulfils its primary purpose of compensating road accident victims on time. A decision will then be taken after Tuesday's meeting. The department has also reiterated plans to finalise the Road Accident Benefit Scheme bill. The bill is set to introduce a no-fault system to make it easier for road accident victims to access the benefits without costly legal bills.
