Transport Minister reveals RAF's financial liabilities amid court appeal

The interim board of the Road Accident Fund (RAF) has been asked by the Transport Department to determine the number of disputed claims it owes amid an appeal of a court ruling that ordered payouts.

This was revealed by Transport Minister Barbara Creecy when she was responding to DA MP Farhat Essack during a question-and-answer session in the National Assembly on Wednesday.

Essack enquired whether the RAF incurred any liabilities connected to former CEO Collins Letsoalo’s introduction of new eligibility for claims, which could expose the State to billions of rand in new claims.

Creecy clarified that Letsoalo did not introduce new eligibility requirements for claims.

“The Road Accident Fund, through a board notice, which was gazetted on 6 May 2022, introduced terms and conditions for claims to be administered for effective claims processing.

“According to the RAF, this decision was at the time informed by a large number of claims that did not have the required documentation to enable the fund to assess and settle claims, and enable the RAF to expedite the settlement of claims, as provided for under Section 26 of the RAF Act.”

The minister also said the board’s notice was set aside in court, but the matter was currently in the appeal stage.

“At that time, the RAF was granted leave to appeal; these terms and conditions that were included in the board notice are still in place. Should the RAF lose this case, then the entity will be burdened with re-launched claims, rather than new claims and new liability,” she said.

Creecy said since the appointment of the interim RAF board, the Fund was in the process of determining the number and value of all court orders as a result of contested claims.

But, MK Party MP Talente Kubheka noted that the RAF has recently lost a court case and will need cash to pay claims within 14 days of a court order settlement.

“Chickens have come home to roost. Minister, the strategy to get rid of Collins Letsoalo is clearly backfiring on your choices,” Kubheka said.

He asked if Creecy supported the reported moves by the interim board to disperse R19 billion in outstanding claims.

“Where is RAF going to get the cash to pay claims within 14 days?” Kubheka asked.

In response, Creecy said that because the courts made the decision, obviously, RAF can only pay out the claims that it has money to pay out.

“At the moment, we are busy asking the Road Accident Fund’s interim board to quantify exactly what we owe. Once we have that information, we will be in a better position to take appropriate action,” she said.

The minister also revealed that they have asked President Cyril Ramaphosa to extend the proclamation that authorises the Special Investigating Unit (SIU) to probe the affairs of the RAF.

“We have written asking to extend the scope of the inquiry from 2021, when it ended, to the present time. The director-general has followed up, and there is a process of preparing a submission from the side of the SIU to the president in this regard,” she said.

mayibongwe.maqhina@inl.co.za