Government is paying state CEOs millions of rands for maladministration, bad audits and missed targets: AA

The Automobile Association of South Africa says that parliament needs to review how chief executives at state-owned companies are paid, noting that these individuals are drawing salaries of millions of rands, but are failing to deliver.

“The high remuneration of executives at State-Owned Enterprises (SOEs) remains a concern and should be the focus of a Parliamentary inquiry in 2022,” it said. This remains particularly true in several groups or entities within the transport sector, it added.

The AA reviewed the Road Traffic Infringement Agency (RTIA), the Road Traffic Management Corporation (RTMC) and the Gautrain Management Agency (GMA), a provincial public entity in Gauteng, and found millions of rands being paid out to the CEOs of these companies amid dismissals, adverse audits and missed targets.

In the case of the RTIA, its Registrar and CEO was paid a remuneration package of just under R10.9 million in 2020 but was fired earlier this year for what the agency said was “serious maladministration”, the AA said.

In the 2020/2021 Annual Report of the RTMC, the Auditor-General noted that the management of the Corporation did not ensure the financial statements “… were in line with the reporting framework, and [that they] were accurate and complete”.

“Yet, in the same year, the CEO of the RTMC’s total remuneration was R9.8 million, in spite of the adverse findings of the Auditor-General. In addition, the RTMC has failed to fulfil its core mandate of reducing road deaths in South Africa, despite receiving billions of rands from the government to address the issue.”

In the case of the GMA, its CEO, in a recent television interview, declined to explain the remuneration policy of the Agency. In 2020, the seven-member GMA Executive Management team received R8.4 million in bonuses, and in 2021 the executive team received R4.2 million in bonuses, despite the system never achieving projected ridership levels, and with the current low levels of commuters declining even further.

“In fact, Gautrain has never achieved its target annual ridership levels since operations commenced. In 2017, the system recorded its highest ridership levels at just over 15.6 million riders, a far cry from its projected annual ridership of 47.5 million commuters,” the AA said.

“The low number of people using the Gautrain has negative financial implications for all Gauteng citizens who fund the private concessionaire of the system for any shortfall in ridership levels. In the past two years, this funding – through a mechanism known as the Patronage Guarantee – has amounted to around R4 billion.”

The AA says while the GMA may want to assure the public that it is reaching other targets – such as the punctuality of the system, and clean audit outcomes – this is really a smokescreen to cover for the failings relating to its core function of attracting sufficient commuters to ride on the Gautrain.

The association said it will be engaging with parliament in the new year to lobby for the inquiry into these and other SOEs, adding that the public has a right to demand these entities are held to account for the money they are allocated, and for the remuneration executives receive.

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