Gauteng's ‘debt collector' move against the RAF and Compensation Fund
The province is looking into other income streams to pay the e-toll debt and GFIP maintenance backlog, including liquor licences, gambling taxes, and advertising. Picture: Moneyweb
The Gauteng provincial government is appointing 'debt collectors' to put systems in place to ensure the payment of the medical costs of road accident victims and injured workers at public hospitals in the province by the Road Accident Fund (RAF) and the Compensation Fund.
'Unfortunately, for the last few years, because of inefficient systems, we have not been collecting that money,' said Gauteng MEC for Finance and Economic Development Lebogang Maile on Monday.
'It's a lot of money. We need it for our revenue,' he said.
Maile said last year that the RAF claims alone amount to about R10 billion.
ALSO READ: Gauteng aims to use RAF medical expenses claims to pay e-toll debt
Province has not started paying e-toll maintenance bill
Maile further said he does 'not necessarily' expect an adverse audit opinion from the Auditor-General (AG) because of the province's commitment to pay R4.1 billion for maintenance backlogs on the Gauteng Freeway Improvement Project (GFIP), which is not owned by the province but is a South African National Roads Agency (Sanral) asset.
Maile confirmed to Moneyweb in October 2024 that the proceeds of the RAF public hospital claims are one of the income streams to pay for the province's almost R20 billion e-toll-related debt and GFIP road maintenance financial commitments.
He said on Monday that the Gauteng government has not yet paid any of the R4.1 billion it committed to pay towards the GFIP maintenance backlog because the province is still engaged in 'a process' with National Treasury about this payment.
Maile said once that process is concluded, the province will be able to explain to the public that it is 'on course in ensuring that we meet our commitments'.
ALSO READ: R25.5 billion deficit over five years — Can RAF afford to pay out claims?
His comment about not making any payments yet towards the R4.1 billion GFIP maintenance backlog is at odds with statements made in September 2024.
Maile said then that the provincial government is starting the process of servicing the historical e-toll debt of R12.9 billion in five equal annual instalments at the government's five-year interest rate.
He added at the time that the first instalment the province was paying on 30 September 2024 amounted to R3.8 billion, consisting of R3.2 billion in historical debt and the maintenance portion of R546 million.
In terms of the memorandum of agreement signed between the Gauteng provincial government, National Treasury, the Department of Transport, and Sanral:
Gauteng agreed to pay 30% of Sanral's R43 billion e-toll debt and interest obligations, which amounts to R12.93 billion;
Gauteng further agreed to contribute R4.1 billion to the maintenance backlog on the GFIP; and
National Treasury agreed to cover the remaining 70% of Sanral's e-toll debt and interest obligations.
E-tolls on the GFIP were scrapped effective 11 April 2024 when the connection to the GFIP gantries was disconnected.
ALSO READ: RAF/Discovery judgement: the RAF did not 'win' – experts
MEC doesn't foresee problems with AG audit
Maile said on Monday the province has not yet engaged the AG about its commitment to pay R4.1 billion towards the road maintenance backlog on the GFIP, but this will happen once the process with National Treasury is concluded.
He said he did not necessarily see the payment of R4.1 billion towards assets the province did not own creating problems with the AG's audit, 'because our residents are using these roads'.
'It's not like we just are giving [away] our money. We are paying on behalf of the citizens,' he said.
Organisation Undoing Tax Abuse (Outa) CEO Wayne Duvenage said on Tuesday it does not make sense for Gauteng to pay for maintenance on assets it does not own.
Duvenage said Gauteng has roads that are in its jurisdiction and are its assets, and Johannesburg has its roads, 'and they normally stick to that'.
'Why then don't they [Gauteng] fix City of Joburg and Ekurhuleni potholes while they are about it? There are also Gauteng citizens riding on those roads,' he said.
RAF head of corporate communications McIntosh Polela confirmed last year that claims from the state, including the Gauteng provincial government, are nothing new and 'it is something that has always been happening and is currently ongoing'.
ALSO READ: Compensation Fund missing documents for 25 000 pensioners
Maile said on Monday that the province has not engaged directly with the RAF over the planned claims against the fund and does not anticipate any payment problems when it submits its claims because the law dictates that the RAF and the Compensation Fund must pay.
'All that is required is that person X was there. The onus … the ball is in our court to prove that patient X came through [the hospital] and the RAF must pay,' he said.
Maile said other income streams the province has identified to pay the e-toll debt and GFIP maintenance backlog include liquor licences, gambling taxes, advertising, and the commercialisation of some of the province's buildings and land.
'We have actually started a process now through one of our agencies to call for businesses who have ideas on what revenue streams we can get,' he said.
This article was republished from Moneyweb. Read the original here.
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