Issued by: Ministry of Finance
19 MARCH 1997
In line with Government's drive to improve financial management, approval has been obtained to outsource the financing of its motor vehicle scheme for senior officials.
In terms of the existing arrangement, government has been giving loans to officials at the rank of Director and above to purchase a vehicle. About 3 000 officials qualify for this scheme. The loans are repaid over a 48 month period from a travelling allowance. Approximately R35 million is needed annually to fund these loans, and the current book value of outstanding loans amounts to approximately R250 million.
The contract was put out to tender, and has been awarded to Stannic. In terms of the contract, existing loans and their administration will be taken over by Stannic, freeing government of the administration of this scheme. Approximately R250 million will be paid back into the Exchequer in 1997/1998, which will assist with government's funding requirement in 1997/98.
The outsourcing of this specialist activity to the private sector co-incides with and complements other government initiatives to improve the overall management in government - the management of cash, of assets, of procurement and of logistics have all been receiving attention in terms of the government's policy to ensure that taxpayers receive better value for money.
Issued by the Ministry of Finance Cape Town 19 March 1997