Mbalula praises RAF task team after fund records first surplus in 40 years
Transport Minister Fikile Mbalula said that they managed to reduce those costs by a whopping R7 billion and their finance costs had also declined by more than 60%.
CAPE TOWN - The Transport minister has hailed the team tasked with turning around the Road Accident Fund (RAF) after the fund recorded its first surplus in 40 years.
The fund has been a thorn in the nation's side for many years now, representing one of the biggest liabilities to the fiscus second only to Eskom.
On Monday, Transport Minister Fikile Mbalula announced that they were on the way to turning the fund around.
Aggressive administrative cost-cutting was the first step for the special team tasked with fixing the fund.
Mbalula said that they managed to reduce those costs by a whopping R7 billion and their finance costs had also declined by more than 60%.
Mbalula said that it was a really good start.
"It is not yet uhuru, we have not yet arrived but the signs of where we're going, it's paradise. The foundation of it is here."
The minister said that they had identified another major structural shortcoming - their model centres on litigation which meant very high legal costs and while there were different views on how to address that, changes needed to be made.
"If we look at the situation we are in, we're basically Father Christmas. This does not assist our people," Minister Mbalula said.
Over the years, the fund has been called on to pay out more and more as the number of road accidents have risen.
There has also been a marked increase in fraudulent claims.
The RAF team acknowledged that administrative failings in the past led to double payments to some law firms and they were now taking a harder stance on more than 100 firms that had yet to pay back the money.