The Road Traffic Management Corporation (RTMC) has run out of money

February 8 2012 at 01:18pm
By Deon de Lange

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The Road Traffic Management Corporation (RTMC) has run out of money and is teetering on the brink of financial collapse.

The Road Traffic Management Corporation (RTMC), tasked with co-ordinating law enforcement to keep the country’s roads safe and in good condition, has run out of money and is teetering on the brink of financial collapse.

Acting CEO Collins Letsoalo shocked members of the National Assembly’s transport committee on Tuesday when he admitted that the organisation was “effectively insolvent” after the National Treasury turned down a request for additional funding.

The situation has led to all vacant posts at the corporation, currently about 30 percent, being frozen.

It had also caused “low staff morale” as “deserving staff members” had not been awarded performance bonuses, Letsoalo said.

Its cash woes stem largely from the fact that previous managers – and the board – presided over chronic mismanagement and gross irregularities that culminated in unauthorised spending of about R600 million.

According to an earlier report by a task team appointed to investigate, millions of rand went down the drain as public funds were splurged on luxury cars, unused office space, unnecessary auditing contracts and inappropriate IT.

For instance, the previous management bought an accident reporting system for R85m, installed an IT helpdesk for R9m, a payroll system for R34m and entered into a R658m, 10-year property lease – dwarfing its annual budget of R78m.

In an attempt to sort out the mess, the RTMC hired auditing firm Deloitte to clean up its books – in spite of already employing a fully staffed financial management team – at a cost of R13.3m.

And despite Transport Minister Sibusiso Ndebele’s promise last September that he would take a “zero tolerance” approach to fraud, corruption and mismanagement – and that wrongdoers would “face the consequences” – not a single official has been successfully prosecuted.

on Tuesday, DA MP and the party’s transport spokesman Ian Ollis said

: “I am, therefore, calling on Transport Minister Sibusiso Ndebele to urgently intervene in the matter and resolve the financial deadlock,” he said.

But addressing the committee yesterday, Ndebele expressed satisfaction at the “interventions” under way to address the “challenges besetting (the RTMC)”. - Political Bureau