24 January 1999
The Minister of Transport Mac Maharaj announced today that WesBank has won the tender to provide R750-million worth of vehicle finance to national and provincial government employees who qualify for car allowances as part of their remuneration packages.
The two-year contract, which starts in March, is one of the largest single wheels-financing deals ever done in South Africa.
Maharaj welcomed the finalisation of the tender as another step forward in the restructuring of the government’s provision of motor vehicles.
"In the deal we have successfully transferred the risk for the financing of motor vehicles to individual government employees from the public sector to the private sector.
"This means that the capital expenditure in the purchase of new vehicles will no longer be carried on the government balance sheet, which should effect savings in the cost of capital to the government and ultimately the taxpayer.
"Furthermore, this streamlining of the car finance will lead to greater efficiency as the administrative burden of the previous system, which was borne by departments and provinces, will now be carried by WesBank."
Previously the financing of government subsidised cars was through the capital expenditure budget of each department or province, which then recovered the amount from the employee over three to six years depending on the individual vehicle contract.
Currently government finances 11,458 vehicles and enters 3,000 new financing agreements annually. The WesBank contract will cover all new agreements as well as the financing of an estimated backlog of about 3,000 vehicles.
Under the new system, the employee will enter into an individual contract with WesBank, which will include both the capital repayments and the maintenance of a vehicle purchased directly from the manufacturers on a separate government contract. As part of the contract, WesBank has outsourced the maintenance of the vehicles to Avis Fleet Services.
Maharaj said the new system should impact favourably on service delivery to both government employees and government as the state no longer had to manage the individual contracts and be left with surplus vehicles on its books if employees should terminate service.
This is part of the Department of Transport’s overall restructuring of the government’s system of motor vehicles in order to improve efficiency and eradicate the misuse and abuse that has marked the previous system.
Last year the Department of Transport announced that Imperial Holdings was the preferred bidder to provide transport services to five national departments and was reaching financial closure this quarter. It also awarded a three-year contract with a turnover value of R750 million per year for the managed maintenance of government’s large vehicle fleet to First Auto.
The Department is currently evaluating tenders for Vehicle Identification Technology (VIT), which will allow for electronic identification and authorisation of fuel purchases to further stamp out corruption and the fraudulent practices of the past.
Inquiries: Nasherika Sewpersadh (Department of Transport)
Phone: (012) 309 3165 Fax: (012) 328 6530
Issued by Didi Moyle: PA and Media Liaison Officer to the Minister of Transport
Didi Moyle
PA and Media Liaison Officer to the Minister of Transport
Pretoria: (012) 309 3131 (phone) or (012) 328 3194 (fax)
Cape Town: (021) 457260 (phone) or (021) 461 6845 (fax)
email: moyle@ mweb.co.za
or moyled@ndot.pwv.gov.za
(Pretoria only)
cell: 082 808 5108