NATIONAL ASSEMBLY
FOR WRITTEN REPLY
QUESTION NO 256
DATE REPLY SUBMITTED: TUESDAY, 29 MARCH 2011
DATE OF PUBLICATION IN INTERNAL QUESTION PAPER: FRIDAY, 18 FEBRUARY 2011
(INTERNAL QUESTION PAPER: NO 2 â 2011)
Mr P J C Pretorius (DA) asked the Minister of Transport:
(1) Whether the Road Traffic Management Corporation (RTMC) operated at a
loss in the 2009-10 financial year; if so, (a) why, (b) what was the
loss and (c) how was the budgetary shortfall covered;
(2) whether the RTMC is still a viable concern; if not, what is the
position in this regard; if so, what are the relevant details;
(3) whether the RTMC has budgeted for a deficit in any of the past three
financial years; if so, (a) why and (b) for what amount in each year;
(4) whether it is practice or policy to budget for a deficit; if so, on
which statutory provisions does such practice or policy rely;
(5) whether he intends taking any steps to ensure that the RTMC remains a
viable concern; if so, what steps?
NW277E
REPLY:
The Minister of Transport:
(1) Yes, the Road Traffic management Corporation (RTMC) operated at a
loss in the 2009-10 financial year as reflected in the Corporationâs
Annual Financial Statements.
a) The RTMC budgeted for and utilized transaction fees to defray some of
its expenditure. These transaction fees are not recorded as revenue
in the statement of the financial performance, resulting in a net
deficit.
b) A deficit of R88 million as reflected in the statement of financial
performance. The deficit amounts to R72 million after adjusting the
non-cash expenditure items.
c) As indicated above, the shortfall on the budget was covered by the
transaction fees.
(2) Yes, the RTMC is still a viable concern. The Corporation operated on
a net deficit and the statement of financial position for the period
ending 31 March 2010 reflects a position of technical insolvency.
Even though there are Government grants allocation of R78 million for
the next financial year (2011/12) and R83 million and R87 million for
the financial years 2012/13 and 2013/14, respectively, these
allocations are considered grossly inadequate given the huge mandate
of the Corporation to reduce road fatalities. The Corporation will
not fulfill its mandate and will operate on a limited scope. The
allocation of R78 million for the next financial year will largely
cover the payroll costs and some administrative and operational
expenses. There is a need to request supplementary budget from the
relevant authorities in order for the Corporation to make the desired
impact on road safety.
(3) Yes, the RTMC budgeted for a deficit for the 2009/10 financial year
as reflected in the annual financial statements.
a) The RTMC budgeted for the use of transaction fees without approval
from the relevant authority, i.e. National Treasury. Management
identified certain projects that are considered eNaTIS related and
decided that the eNaTIS transaction fees will be used to fund these
projects without obtaining approval from the Department of Transport
and National Treasury.
b) The budget deficit for 2009/10 financial year amounted to R194
million.
(4) It is neither the practice, nor policy, for the entity to budget for
a deficit.
The Public Finance Management Act (PFMA), 1999 (Act No 1 of 1999), as
amended, which is the supreme law on financial matters in the public
sector, prohibits the RTMC from budgeting for a deficit, unless prior
approval has been obtained from National Treasury.
(5) The RTMC is an important organ in ensuring that South Africaâs roads
are safe and that road fatalities are reduced to the minimum level.
The Department of Transport will, therefore, pursue the following
interventions to ensure that the RTMC remains a viable concern:
⢠Ensure the development and implementation of a comprehensive
revenue generation strategy with the approval of National
Treasury;
⢠implement a cost containment program, which includes the
utilization of internal capacity to deliver on key projects;
⢠enhance its oversight responsibility to ensure that allocated
funds are used efficiently towards the mandate of the
Corporation;
⢠ensure that relevant amendments to the Road Traffic Management
Corporation Act, 1999 (Act No 20 of 1999), and regulations are
passed; and
⢠ensure that the corporate governance within the Corporation is
improved.