RM80mil to maintain government cars

KUALA LUMPUR: The Federal Government is paying RM80mil annually to Spanco Sdn Bhd to have the latter maintain its fleet of 1,400 Proton Perdana V6 Executives and other vehicles designated for official use.

This works out to about RM12,000 annually to maintain each of the locally-made luxury-line Proton Perdana leased from Spanco.

On Friday, Terengganu Mentri Besar Datuk Ahmad Said called on the ACA to probe the high service charges imposed by Spanco.

The Perdanas were part of a fleet of 5,600 vehicles of various models and makes that Spanco, a vehicle fleet management company contracted to lease and maintain vehicles for ministers, top civil servants and senior government officials, made available to the Government.

The contract was inked in 1994 for the duration of 25 years as part of the Government’s privatisation exercise. It expires in 2019.

In that contract, the Government paid Spanco RM100mil a year to lease and maintain its entire fleet.

But in June 2003, Spanco and the Government returned to the negotiating table when the Finance Ministry found the contract awarded to Spanco in 1994 excessive. The Government appointed an international audit firm to look into Spanco’s books.

Under the revised agreement, the audit firm recommended the Government cut back the contract by 20% to RM80mil annually. Spanco chief executive officer Datuk Hamzah Mohd Salleh said the issue of cost overrun and high maintenance charges did not arise at all under the Government-Spanco deal.

“Any overrun would be borne by us,” he said, but declined to reveal the details of the package.

“We only leased the vehicles to the Federal Government. We don’t do the state governments’ business.”

A source told The Star that the Government was Spanco’s only customer.

Under the deal, the Government gets new Proton Perdanas every fourth year.