More Heads Roll in Transport

The Organisation Undoing Tax Abuse (OUTA) welcomes Minister Barbara Creecy’s decision to dissolve the Road Accident Fund (RAF) board, the latest in a string of accountability moves within the Department of Transport.

This follows the suspension of RAF CEO Collins Letsoalo in June, along with a series of high-level suspensions and interventions at other entities under the Transport portfolio.

“Too much has gone unchecked for too long. Minister Creecy’s decision to dissolve the RAF board sends a strong message that poor governance and executive overreach will no longer be tolerated,” says Wayne Duvenage, OUTA CEO.

The Minister cited deep governance failures at the RAF, including:

• Wasteful litigation over accounting standards
• The mishandled suspension of Letsoalo
• A flood of default judgments increasing RAF’s liabilities
• Persistent divisions within the board
• Longstanding failure to fill critical posts, including Chief Claims Officer and Head of Legal.

In OUTA’s view, the board failed to challenge irregular conduct and allowed serious issues to fester — including the suspension of other senior staff without due process, which appeared aimed at silencing internal dissent.
OUTA calls on the Minister to appoint a new board with the governance depth and political will to reform the RAF, restore its mandate, and investigate misconduct under the previous leadership.

This follows other key changes in the Transport sector:

• Road Traffic Management Corporation (RTMC) CEO advocate Makhosini Msibi was placed on precautionary suspension by the RTMC board from 1 July.
• Airports Company South Africa (ACSA) group executive for enterprise, security and compliance, Lieutenant-General Mzwandile Petros, was also suspended.
• RAF’s chief investment officer Sefotle Modiba was suspended with Letsoalo.

And now, after months of delay, the Department of Transport has finally filed papers in the Pretoria High Court aimed at overturning the controversial R898 million contract awarded to Idemia South Africa to supply a new driving licence card machine.

In early September last year, OUTA exposed serious procurement irregularities in this contract and submitted a detailed report to Minister Creecy, who passed it on to the Auditor-General of South Africa (AGSA) and asked for further investigation (see here).

The AGSA’s report, which forms part of the Department’s court papers, confirms that Minister Creecy requested an investigation on 5 September, following “widespread public concern” over the appointment of Idemia. That request was accompanied by OUTA’s detailed report outlining allegations of procurement irregularities.

“The minister’s communication was accompanied by a letter from the Organisation Undoing Tax Abuse (OUTA), in which specific allegations of an irregular procurement process were made,” says the AGSA’s report. “At the time of receiving the minister’s request, auditors at the Auditor-General South Africa (AGSA) were already in the process of reviewing the specified tender as an early regularity audit process.” The AGSA then expanded its investigation scope.

“The Auditor-General took our concerns seriously, and we commend Minister Creecy for acting on them. This is how civil society, oversight institutions and public representatives should work together to tackle maladministration,” says Duvenage.

The court papers outline multiple flaws in the contract, including:

• A nearly R400 million cost escalation, from the original Cabinet-approved budget of R486.385 million to the signed contract of R898.597 million.
• Use of outdated pricing.
• Omission of printing material costs.
• Evaluation errors in scoring and machine assessments.
• Bidder non-compliance and weak documentation.

The case is brought by the Department of Transport, with the founding affidavit filed by the department’s acting director-general, Mathabatha Mokonyama, against Idemia South Africa. (The DG, Advocate James Mlawu, resigned last year with effect from 28 February 2025).

The department is asking the court to set aside the Idemia contract, re-run the tender and allow the Department of Home Affairs to print the licence cards in the interim.

The procurement process was managed by the Driving Licence Card Account (DLCA), a Department of Transport entity which the department admits lacked the capacity to handle such a complex procurement.

While the tender documents refer to “Idemia Identity and Security – South Africa,” OUTA has noted that no such entity exists in the Companies and Intellectual Property Commission (CIPC) registry. The contract was ultimately signed with Idemia South Africa, a company that changed its name from Morpho Cards SA in 2021.

The Department has included the AGSA’s report, its own internal procurement assessment, and an external review as supporting evidence in the case. A notice in the court file confirms that the department is opposing mediation, citing unresolved disputes with Idemia. It is not yet clear whether Idemia will oppose the legal challenge.