Pretoria - The procurement of the first 100 vehicles in an outright purchase model is doing away with the expenses "middle-man" who charged the City of Tshwane exorbitant lease rates without adding value to the service.
This feat was celebrated by the mayor Randall Williams and members of the multiparty executive, including the Speaker of Council Dr Murunwa Makwarela, when they unveiled the first 100 of 238 vehicles that will be under the full ownership of the City in the current financial year.
After identifying the lease agreements that were entered into by the previous administration as problematic and wasteful, the City has been letting contracts run-out in a "de-fleeting" initiative that was confused by the public and the media as a loss of vehicles, but they hoped everything would make sense now.
Williams said the City spent at least R400 million per year on vehicle leases which did not make any sense because it would have been cheaper to just purchase the vehicles and channel the rest of the money towards providing service delivery, like patching potholes and fixing street lights.
The multiparty coalition believed this marked a change of tradition; whereby the City was spending as much as R6 million for a skip truck over a five year contract, paying R100 000 per month.
"After five years we had to return the truck. Now we bought the truck for R3 million and the truck is now under guarantee for 10 years. We can use it operationally for 10 years but there you paid R6 million for five years but now we are paying R3 million for 10 years. That is the type of saving we are bringing to the City now.
"Instead of us paying over R400 million for our fleet a year we are now paying less than R200 million. We now free-up money that we can use elsewhere for services. We have to cut grass more regularly and make sure we have more teams to fix the street lights," said Williams, who indicated that a few more hundred vehicles will also be bought in the next financial year to add to the 238.
MMC for Corporate and Share Services, who manages the City's fleet, Kingsley Wakelin, said the vehicles which include bakkies, fire engines, trucks and skip trucks, were purchased for R100 million, utilising the National Treasury contract, which allows for direct acquisition from OEMs.
Furthermore, vehicles were purchased directly from the manufacturers like Isuzu, Ford and Nissan, allowing a saving of between 15% to 25% in mark-ups. The acquisition brings the total number of vehicles bought in the last five years to 1 373, "ultimately putting taxpayers’ money to good use."
Wakelin said out of these 1 373, 694 are direct lease replacements which will assist the City to lower lease costs annually, from R400 million to under R180 million. The 238 vehicles being acquired in the current financial year will be be split between the Energy Department, ROC, Water and Sanitation, Waste Management and Roads and Transport.
Pretoria News