- The Road Accident Fund (RAF) has a contract which sees it paying R1 666 per office chair
- The RAF pays around R500 000 for 300 office chairs at its Pretoria office
- The company receives almost all of its funding through the petrol levy which is currently at R1.93 per litre and will increase when fuel prices increase next week
The Road Accident Fund (RAF) has approved a contract which sees the broke company paying R1 666 per office chair for its Menlyn, Pretoria headquarters. The contract is worth just under R500 000 per month for the rental of 300 office chairs.
What makes this particularly shocking is that the RAF is largely funded through the petrol levy which at the current price of fuel means motorists are forking out R1.93 per litre of fuel to fund the company. That number is set to rise next week when fuel prices are hiked yet again.
The RAF currently has liabilities in excess of R190 billion which makes it technically insolvent. According to reports the RAF earlier tried to push through a R60 million furniture rental contract with the same company.
Briefly.co.za gathered that both the failed contract and the approved one were completed without completing due process and were never put through a proper tender process.
Despite receiving (at current prices) R1.93 for every litre of fuel sold in South Africa, the RAF recorded a R34.7 billion loss in the last financial year.
TimesLive.co.za reported that the RAF will receive more money from already cash-strapped motorists from next week when the price of petrol and diesel increases again.
The RAF has admitted that renting furniture did not make the best financial sense but argued it needed to do so in order to settle claims in a timely manner. This has resulted in a creditors book of around R8 billion.
Transport Minister Blade Nzimande dissolved the RAF’s board last week and said it was dysfunctional and affected by serious divisions and infighting.
The company which rents the chairs to the RAF has been flagged by the National Treasury after it attempted to enter a similar deal with Eskom.
In that proposed deal, the power utility would have paid R24 million to purchase just over 9 000 chairs when an inspection revealed it only needed 500 chairs.
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