‘HAVE MORE THAN ONE FLEET OPERATOR’
This will promote a more inclusive and competitive business environment, says analyst
Ultimately, it is best if the government can have a transparent tender for the fleet operations, but it may not be completely possible...
SHAMSUL YUNOS Independent automotive analyst
I suggest the fleet operations should be looked at closely and each agency should offer its own tender under the scrutiny of the Malaysian Anti-Corruption Commission.
THE government can ensure better value for taxpayers’ money and mitigate the risks associated with relying on a single provider by allowing multiple companies to manage its vehicle fleet.
Industry observers are in favour of this approach in the wake of the ongoing investigations into Spanco Sdn Bhd.
“Obviously having more than one fleet operator for the government would give room for competition.
“But since the fleet is likely to be fixed and assigned to each company, it still boils down to the negotiated terms,” said independent automotive analyst Shamsul Yunos.
He said diversifying the management of the government fleet would promote a more inclusive and competitive business environment.
It would also reduce dependency on any single entity, thereby increasing resilience and flexibility in the face of challenges or disruptions.
Shamsul, however, raised concerns about potential logistical complexities and increased administrative burden associated with managing multiple contracts and service providers.
“Ultimately, it is best if the government can have a transparent tender for the fleet operations, but it may not be completely possible because some of the government vehicles being maintained may be from the military or security forces.”
Another industry observer, Hezeri Samsuri, highlighted the need for transparency and equity in the tendering process.
He argued that the current system lacked transparency and accountability, leading to questions as to whether the contracts were awarded fairly.
“The contract has always been up for tender and many parties have bid but failed. I suggest the fleet operations should be looked at closely and each agency should offer its own tender under the scrutiny of the Malaysian Anti-Corruption Commission.”
He said the prevailing sentiment underscored the challenges of overhauling entrenched practices.
The familiarity and efficiency gained from years of collaboration with a single provider presented a significant hurdle to change, he said.
“The prospect of replacing a company necessitates the development of new standard operating procedures (SOPs) for vehicle operations, a task that may prove daunting for government agencies.
“In all honesty, if government agencies can look into their SOPs of handling their fleet of vehicles, they can do it better with a much lower cost. But who can actually change an SOP embedded for so many years? Which agency can replace a team of drivers so that they can take care of the vehicles?” he asked.
Prime Minister Datuk Seri Anwar Ibrahim had said the government was committed to combating corruption in the project tender for the supply, repair and maintenance of government vehicles.
Spanco was first awarded the contract to manage the end-to-end fleet management of government vehicles in 1994.
Its 25-year concession came to an end in December 2018, but the company was given two extensions of six months each in 2019 until the end of that year, with a third extension reportedly given until June 2020.
The government fleet, all leased through a five-year replacement cycle arrangement, included vehicles used by ministers and top civil servants as well as police patrol vehicles.
The five-year replacement cycle was meant to ensure the government’s fleet stayed current, with the maintenance cost of each of these vehicles capped at pre-determined limits.
Last July, it was reported that Tan Sri Vincent Tan filed a suit against the Finance Ministry and Spanco over a multimillion ringgit vehicle fleet concession deal lost by the Naza Corp-Berjaya Corp consortium.
According to the Berjaya group founder, the consortium was picked
HEZERI SAMSURI Industry observer
by the previous government to handle the fleet concession through a letter of intent issued in 2019.
The consortium was set to replace Spanco as the fleet management provider.
Tan said the government unfairly terminated the agreement with Naza-Berjaya before the actual award was due to be announced.
In February 2019, the government called for proposals for the contract to supply, maintain and manage its fleet of official cars for the next 15 years.
Aside from the Naza-Berjaya consortium, other bidders reportedly included Sime Darby Bhd, DRBHICOM Bhd, Samling Group, Comos and Go Auto as well as Spanco.