The government’s open tender to companies to manage its fleet of vehicles has attracted the attention of Malaysia’s most prominent automotive groups, The Star reports. This is after the end of Spanco’s 25-year concession in December last year, although the company has been given an extension to continue managing the fleet until the end of 2019.
However, the company is seeking a new concession from the government, which made a request for proposal earlier in February this year for a 15-year contract. While the size of the concession has yet to be finalised, estimates based on the current fleet of 12,500 vehicles suggest the contract could be worth RM300 million a year from the fifth year onwards.
“The size of the contract varies from year to year, depending on the government’s fleet requirement and the number of new vehicles to be purchased as replacement,” explained one industry source.
The contract, which includes national and non-national brands, will cover official vehicles used by ministers and high-ranking government officials, department cars, as well as vehicles used by the police force.
Among the vehicles that are part of the contract include 32 Toyota Vellfire MPVs, which will need to be replaced every four years, along with around 3,000 Honda Accord sedans. Meanwhile, 1,300 police patrol vehicles and 8,000 units of the Proton Saga and Persona models for other departments will need replacing over the next five years.
Under the terms of the contract, the government will pay a monthly rental for each new vehicle it requires, and this fee excludes a fixed monthly bill for maintenance, repairs and management of each vehicle.
Given the lucrative long-term contract up for grabs, Spanco faces plenty of competition to retain its concession, with no less than seven bids reportedly submitted. The Naza Group, Berjaya Group, Sime Darby, DRB-Hicom, Samling Group, Comos and Go Auto are among those that have expressed strong interest in securing the contract.
“Each bidder is offering their unique capability, strength and value propositions for the government to consider, ” said another source who is familiar with the bidding process.
“You are looking at an investment of around RM1.5 billion over the next five years to purchase the new vehicles for the government’s fleet, ” an industry source said. And then, there is the cost of repairs, maintenance as well as management of the whole fleet. So, the investment outlay required is huge, ” he added.
Spanco will be banking on its experience and track record to hopefully beat out the competition as the original concession holder, having first secured the contract to manage the government’s fleet of cars back in 1994.
The company leases each car to the government on a five-year term, before it is replaced with a new car. The five-year replacement cycle is to ensure the fleet remains current, and the maintenance cost of each of vehicle is capped at pre-determined limits.
In the report, Spanco CEO Datuk Hamzah Mohd Salleh said the company provides “unlimited repair and maintenance services for the fleet to ensure that a maximum number of cars are always on the road.”
“Basically, what we do is take over all the risk associated with owning the car and go a step further by offering a replacement vehicle in the event the car requires major service, or is involved in an accident,” he said, adding that Spanco has consistently achieved a target of having 98% of the fleet on the road at any given time over the years.
Hamzah also explained that Spanco buys on average, between 2,000 and 3,000 vehicles a year to maintain the fleet size, with over RM2.5 billion spent on new car purchases during its contract period.
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This is one of the biggest single service contract that the government has. Of course plenty of interest from everyone. Anyone that bags this will be set for life.
Should award to Khazanah Nasional car division
Seems like you had failed comprehension on Open Tender meaning. Toad inside Gua Tempurung?
And here I thought it gonna be pushed back to the respective departments to maintain their vehicles, so this is yet another grand scheme at rebranding cronies once more. Hail Hydra Malaysia!
No way the department gonna maintained their own fleet. And really not cost efficient. We’re taking about hundreds of thousands of vehicle here, not just two or three of what we have at home.
Look at aes camera now. What happened when jpj itself does all the ‘maintenance’ work?
The point of having them managed their own servicing is so they can deal directly with the auto brands, not thru 3rd parties. This was one of the issues raise by PH, now suddenly it’s okey pulak!
Once they come into power and see the money, semua nya OK.
Hehehe yesssss….. now you know all my plans are according to keikaku. Mwuahahahaha!
Naza Group – Peugeot and Kia
Berjaya Group – Mazda
Sime Darby – Hyundai and BMW
DRB-Hicom – Proton and Honda.
(Like) Proton X70, Persona Iriz & Saga FL.
(Dislike) P2 Aruz, Myvi, Bezza & Axia
(Like) Honda CRV, Toyota Vios & Yaris
(Dislike) game over P1 X70, Iriz, Saga FL & Persona
If SPANCO loses this bid, I wonder what will happen to the facility and the people…
Tan Sri already made his money, from a shoplot in Jalan Ipoh to a skyscraper today. Got enough to ensure at least his next generation don’t need to work.
Thank u to previous gahmen. so generous…
the previous gahmen you were talking about is headed by pm4…the crony that spanco used was certain mr eminent person..
spanco secara terang membantu langsung kempen dan menghentam pm4… Spanco did their job well.
Spanco did their job well.
were they the ones maintaining the 1st Proton Perdanas?
Not RM300 million.
https://paultan.org/2015/06/17/govt-paying-rm-222-million-rent-proton/
Betcha will be double this time.
Its Govt superb cost savings to get the Renault Fluence, Captur and Koleos. Only from RM999 per month with 30-day free trial. Good n cheap.
This is one contract all will be lusting for. Open tender? Yeah right.
When we voted these buggers in, we’re expecting changes for the better. Better management, less corruption less overt songlap, overhaul the education system, less racial and religion superiority ideology, promoting harmonious living ….
Mana tau, it’s the same shit macam UMNO Be-End. 2×5
Pakatan Hopeless now pandai jaga poket sendiri.
What does it have to do with a fleet contract? Many countries all over the world are leasing the cars for their law enforcing agencies?
Yes, they lease direct with manufacture. Not the case here.
Here, we’re feeding an extra layer of unnecessary crony like Spanco. It is wastage like this that we want to see gone.
Just like medicine. Why doesn’t the hospitals / MOH buy direct from manufacturer? Why, again, must go through the crony middleman?
Yes exactly bro. The medicine crony middleman, Pharmaniaga Berhad subsidiary of Boustead Holdings.
Here, we shouldnt feeding an extra bloodsucking layer. we want to see them gone.
Go learn different between crony & GLC before u making fool of yourself
such a stupid comment, belajar tak habis ke
I just want to ask Spanco one question:
How did you get the tender previously? By open tender,or by the the famous way, ie the “negotiated” tender?
why SPANCO? Why not UMW Toyota or Honda MY or ETCM Nissan directly? these company directly owns these brand in MY and they have well establish 4S & 3S network whole Peninsula + Sabah & Sarawak what else does SPANCO has that these brand owners doesn’t?
DRB (Honda, VW & Mitsubishi), Berjaya (Mazda) NAZA (Kia, Chevrolet & Peugeot) and Sime Darby (Ford, BMW & Hyundai) now also join bidding what
“Open tender” has difference definition in Malaysia….
My guess is that nothing will change in the system. The Cronies still be around.
This will be an issue as the new comers wont have the maximum capabilities in managing maintenance and government cars are the most used in any part of the country. Spanco’s contribution for the past 25 years have done so much. I am not siding anyone but to manage and maintain is the most important oart rather than be popular to have won the bidding.
The goverment should have fully supported malaysian cars , no wonder even other countries doesnt look at malaysian cars,