The Road Accident Fund will have no more funds to pay accident victims by March next year unless its reserves are augmented by an increase in the fuel levy, the fund's management has said. Should motorists foot the bill for the fund's survival?

The Road Accident Fund will have no more funds to pay accident victims by March next year unless its reserves are augmented by an increase in the fuel levy, the fund's management has said. Should motorists foot the bill for the fund's survival?


CARtoday.com reported in May that the fund's deficit had doubled to R16,7 billion in the past four years and quoted Financial Services Board chief executive Jeff van Rooyen as saying that it was "untenable for the fund to continue with such a deficit". Van Rooyen added that the fund was technically insolvent and experiencing a negative cash flow.


Recently, the fund's financial manager, Johann Rabie, said talks had been held with the national treasury about a further increase in the fuel levy, which was increased from 18,5c to 21,5c per litre (included in the overall price of fuel) in April, but this was refused.


The fund currently operates without an approved annual budget and relies on the levy for income, which amounts to about R4,2 billion each year.


But according to report in on Wednesday, the fund has also been functioning without a board of directors and its associated committees since the expiry of the term of office of the previous board at the end of May.


Several senior executives, including the chief financial officer and the information technology officer, have left or been suspended on suspicion of fraud and corruption.


Former fund chairman Kessie Naidu expressed concern about the delay in appointing a new board for the fund and a lack of effective controls: "I shudder to think what is happening with fraud in the absence of a board".


Rabie said the transport department had assured the fund that the appointment of a board was underway and would be appointed shortly.


Fund spokesman Themba Mhambi confirmed that the organisation's reserves would only last until the end of March next year. Currently the reserve stands at about R300 million.


Mhambi added that appointments to the board were a departmental responsibility. In the interim, decisions normally taken by the board were being referred to the transport department’s acting minister Jeff Radebe.


These matters mainly concerned the expenditure of large sums on procurement, he said, adding that the fund's management had "a firm grip on things".

Original article from Car