Treasury must intervene to halt the collapse of the RTMC

Ian Ollis, Shadow Minister of Transport
7 February 2012

Today, Collins Letsoalo, acting CEO of the Road Traffic Management Corporation (RTMC), revealed in a briefing to the Portfolio Committee on Transport that the RTMC is essentially insolvent as a result 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 licencing their vehicles through the eNatis system, has been spent by the previous management of the RTMC instead of being paid over to the Department of Transport. As a result of this, the RTMC has called on Treasury to write off the R200 million in debt, which the Treasury has thus far refused to do.

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.

It is clear that the situation in itself 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 S’bu Ndebele to urgently intervene in the matter and resolve the financial deadlock.

In addition, the Minister of Transport also needs to open an investigation into the mismangement of funds by the former RTMC management, and ensure that those responsible are held to account.