Govt to terminate contract with car fleet firm

  • Nation
  • Sunday, 18 May 2003

KUALA KLAWANG: The Government has decided to terminate its contract with a firm supplying and maintaining a fleet of official vehicles as it has lost “hundreds of millions of ringgit.”  

The losses stemmed from unusually high claims, including some cases where the maintenance cost more than the price of the vehicles. 

Minister in the Prime Minister’s Department Datuk Seri Dr Rais Yatim said the losses incurred were as a result of “excessive” claims by the firm, which were way beyond the amount the Government would have spent if it had maintained the fleet. 

“The firm was given a contract some nine years ago to supply and maintain about 4,700 official vehicles. 

“The claims submitted by the firm for that purpose had reached a staggering RM100mil every year. 

“What is more questionable is the fact that maintenance claims are higher than the actual cost of purchasing the vehicles,” he said after launching the SK Simpang Durian Parent-Teacher Association's annual general meeting on Friday. 

Dr Rais said the official vehicles were supposed to be owned by the Government at the end of the leasing period. 

However, he said, the vehicles were instead sold by the firm with excessive profits, causing the Government to incur heavy losses. 

“The termination of the contract may result in the Government having to pay compensation to the firm. 

“But it will still benefit the Government than to stick with the terms and conditions of the existing contract,” he said, adding that the Government would revert to the previous system of purchasing and maintaining vehicles under the purview of the respective departments and agencies. 

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