29 July 2010

Good morning to you all and thank you for joining us at this media briefing on the Task Team Report into allegations of mismanagement at the Road Traffic Management Corporation (RTMC).

As you are aware, over the past year, we received various complaints from staff, whistle-blowers and other sources relating to allegations of mismanagement at the RTMC under CEO Mr. Ranthoko Rakgoale. These allegations were brought to the attention of the RTMC Board and the Ministry of Transport ordered an investigation into the allegations.

On 8 February 2010, we further appointed an independent Task Team to investigate allegations of mismanagement, as well as issues relating to leadership, governance, business and finance at the RTMC. Mr. Rakgoale was subsequently suspended and Mr. Collins Letsoalo, Deputy Director-General: Financial Services at the Department of Transport, was appointed acting CEO.

The Task Team, chaired by Mrs. Riah Phiyega (a past Group Executive for Absa Bank Limited as well as Transnet), presented its report to us on Tuesday, 27 July 2010. Key findings of the Task Team report, which will be presented today, include irregular expenditure, inappropriate procurement procedures and unauthorized use of eNaTIS transaction fees. The report will also be presented to the next RTMC Shareholder’s Committee meeting scheduled for next month (August 2010) as well as to the Portfolio Committee on Transport. Our legal advisors are currently studying the report as well as the recommendations.

We want to emphasize that although this Task Team has completed its task, there are still various matters which require further investigation and are subject to future decisions through the RTMC Shareholders’ Committee. Further, the forensic audit process is still underway, the results of which will be actioned by the acting CEO of the RTMC. Therefore, those matters which are still subject to due legal process and internal HR procedures cannot be publicly disclosed at this stage.
One of the key findings of the Task Team relate to an irregular lease agreement of R658 million over a ten year period. The actual loss on this lease is estimated at R11 million. This lease has now been cancelled.

According to the Task Team, the total value of confirmed irregular expenditure actually incurred at the RTMC is currently estimated at R144 million.
The Public Finance Management Act (Act 1 of 1999) makes it abundantly clear that the accounting authority for a public entity commits an act of financial misconduct if that accounting authority willfully or negligently makes or permits an irregular expenditure or a fruitless and wasteful expenditure. Those found guilty of such offences are liable on conviction to a fine, dismissal or imprisonment.

As previously stated, the Department of Transport has adopted a zero tolerance stance when it comes to fraud, corruption and mismanagement. Any person found guilty of such acts must face the consequences of their actions.
The RTMC was established for co-operative and coordinated strategic planning in respect of road traffic matters by the national, provincial and local spheres of government. It is therefore of paramount importance that this agency functions effectively and efficiently to fulfill its mandate.

To this end, our interventions going forward include:
•    The provisions of the RTMC Act need to be reviewed to facilitate operational and governance support of the RTMC.
•    Optimal functioning of the RTMC Shareholders’ Committee needs to be ensured.
•    Strengthening and enhancement of oversight by the Department of Transport over the RTMC.
•    Introducing a controlled and monitored performance management system for the RTMC.
•    Improving the process of the appointment of the RTMC Board and CEO to ensure accountability.

The targets set by Transport Ministers in Africa on the Millennium Development Goals include, among other issues, halving road fatalities by 2014. The Department of Transport has been appointed to champion issues of road safety on behalf of SADC.
The number of deaths and injuries in developing countries, due to traffic crashes, is recognised by the World Bank as a priority health issue. South Africa is unfortunately part of this international trend.
To this end, Road Safety has been identified by our government as a priority.

We therefore remain committed to the AARTO implementation as one of the pillars of the Road Safety Strategy.  This is in line with the Moscow Declaration to which South Africa is a signatory.
The fatalities and injuries on our roads are creating a society of orphans, an unacceptable loss of breadwinners and a major cost to the economy.  We are committed to ensuring that this ceases to be a daily occurrence in South Africa.
An average of 38 people losing their lives on our roads on a daily basis is totally unacceptable.

The AARTO Act is a 12-year-old piece of legislation meant to assist in pushing back this attack on the South African population. The RTMC must ensure that AARTO is implemented successfully.

We are also pleased to announce that we have commenced training of the initial intake of 260 trainee Traffic Officers who will form part of the newly-established National Traffic Law Enforcement Unit.

We have to ensure that we go all out to save lives on our roads and that should be our preoccupation. No other matter will be allowed to sidetrack us from this mission.
Ends.

Enquiries:              Logan Maistry 083 6444 050

ISSUED BY:         MINISTRY OF TRANSPORT
                            www.transport.gov.za