Parliament must intervene at RTMC

The Automobile Association (AA) says an urgent inquiry by Parliament into the operational and financial affairs of the Road Traffic Management Corporation (RTMC) is necessary and overdue. The Association says the Parliamentary Portfolio Committee on Transport should also summon the Chairperson of the RTMC, Mr Zola Majavu to explain why he made false statements about the funding of the Corporation in the RTMC’s 2020 annual report.

The Association further says the RTMC has failed in its core function (contained in the preamble to the RTMC Act) “… to enhance the overall quality of road traffic and, in particular, to promote safety, security, order, discipline and mobility on the roads…”

“Road deaths in South Africa remain high despite the billions of Rands of revenue the RTMC has received to address the issue. The mandate of the RTMC is not being fulfilled, and the high remuneration of executives and Board members grossly exceeds private sector norms for companies of similar size. For instance, the CEO of the RTMC, Adv Makhosini Msibi’s total remuneration in 2020 was R9.8m, in spite of adverse findings by the Auditor-General in respect of the RTMC’s management,” says the AA.

In the last RTMC Annual Report, the Auditor-General found that management at the RTMC did not ensure the financial statements “… were in line with the reporting framework, and (that they) were accurate and complete”.

“Aside from an urgent inquiry into the operational financial affairs of the RTMC, Parliament must establish a committee to investigate and enforce performance standards with justifiable metrics for SOE executives with clear targets for performance bonuses,” the AA comments. “We also believe legislation is needed to reduce the size of SOE Boards to further limit executive remuneration. Taxpayers have a right to understand why the RTMC is costing so much, yet delivering so little, especially in terms of road safety,” notes the AA.

The proposed Parliamentary Inquiry is among several recommendations by the AA in its submission to the Department of Transport commenting on the proposed new fees for the RTMC which are as contained in the Government Gazette seeking to amend the RTMC’s Regulations. The AA is also preparing a further submission to the revised draft regulations published earlier this month.

“The proposed Regulations amending the RTMC’s fees are outrageous. Yet again we see the trend of repurposing traffic law to generate revenue instead of improving safety. If the RTMC needs more money, it should first prove it adds value. It hasn’t yet, which is why we are calling for urgent intervention into its affairs,” says the AA.

In the AA’s view, the drive to generate funds effectively disincentivises the RTMC to improve road safety as this would negatively impact on its revenue.

The conduct of the RTMC’s Chairperson, Zola Majavu is another matter the AA says needs to be investigated.

“In the RTMC’s 2020 Annual Report Mr Majavu states, ‘The entity (RTMC) is wholly dependent on the Transaction Fees for continued funding of operations.’ This is false. The same report shows that the financial contribution of non-Transaction Fee revenue exceeded R400m of the RTMC’s total revenue last year, and the RTMC Act itself provides for numerous sources of revenue. As the chair of a State-Owned Entity, he should be called to explain why he made a false statement in a public document,” says the AA.

The Association says it is also concerned that there is no clear justification for the proposed fee increases for the RTMC which already showed a surplus of nearly R262m in 2020.

“People in South Africa are struggling financially, and for many, a driving licence or PrDP to legally use a vehicle is essential to help them seek or maintain employment. Yet the RTMC, which is responsible for renewing these licences, is squandering taxpayers’ money, pays its executives exorbitant salaries which are unattainable in the private sector, and has millions of Rands in the bank. To now suggest it needs to increase these fees to keep on operating is an insult to every South African, and Parliament needs to step in for the sake of all citizens to put an immediate stop to it,” concludes the AA.

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