DA urges RTMC bailout

The Democratic Alliance (DA) has called on National Treasury to intervene in the collapse of the Road Traffic Management Corporation (RTMC).

Acting CEO of the RTMC Collins Letsoalo, this week in a briefing to the Parliamentary Portfolio Committee on Transport, revealed the corporation is essentially insolvent. This is because of National Treasury's refusal to write off its R200 million accumulated debt burden.

“This insolvency has stemmed from the fact that the R36 raised from every motorist when licensing their vehicles through the eNatis [electronic National Traffic Information System] system, has been spent by the previous management of the RTMC, instead of being paid over to the Department of Transport,” says DA transport shadow minister Ian Ollis.

An investigation into the RTMC revealed that R300 million worth of eNatis transaction fees were used irregularly, and IT-related irregularities amounted to R139 million.

“This refusal by treasury has left the cash-strapped RTMC able to fill only 70% of its staffing positions, and it has had to resort to capping all vacancies. The lack of money has, therefore, led to the fact that the RTMC has halted employing new workers and is allowing vacancies to increase. If this is allowed to continue, it will result in the complete collapse of the RTMC.”

Ollis also says it is clear that the situation is a direct result of mismanagement stemming from a lack of business and strategic plans. ”The method the RTMC has employed of staving off insolvency by capping vacancies is also clearly an unacceptable solution. I am, therefore, calling on transport minister Sibusiso Ndebele to urgently intervene in the matter and resolve the financial deadlock.”

In May, the RTMC was denied a request for increased funding of R92 million by the portfolio committee. There were also suggestions from committee members that the ailing Aarto manager should be closed down since it does not even have a functioning board.

However, at the meeting this week, Ndebele said he is pleased with the progress at the corporation.

“The primary and chief mandate of the Road Traffic Management Corporation is to make South African roads safe... The last time this committee interacted with the leadership of the RTMC, they reported on several interventions that were being undertaken to address challenges besetting this organisation.”

The minister said he is glad the department is making headway in stabilising the RTMC, particularly at the level of leadership. The RTMC recently resolved the outstanding matter of the former CEO, after allegations of mismanagement, where Ranthoko Ragoale stepped down in December. Ndebele said the process to appoint a CEO is well under way.