Thursday, April 17, 2008

Massive RM80 mil to maintain 1,400 Government Perdana's - Solely Contracted to ONE Company

It's either the Star tabloid is trying to play down the matter of the high maintainance Perdana V6 government cars (in view that they can be considered government controlled media), or the journalist who wrote the article can't count. Either way, how stupid do you think the Malaysian public is?

Based on the facts provided in the article. RM80,000,000 is the cost to maintain 1,400 Perdana V6 - annually. If you calculate this on excel or a simple calculator, the cost of maintaining each Perdana V6 is actually RM57,142.85. Compare this to what was quoted in the Star - RM12,000. Certainly a more reasonable figure to a majority of readers.

Therefore, on the matter of the high maintenance national car - $57,000 is quite a lot of money. There isn't a single car that costs that much to maintain, unless it's some sort of exotic sports car. Even then, 57K would probably mean you would fly the mechanic out from Italy - twice a year at least.

We think little needs to be said to add fuel to the fire. It's obvious that corruption is rooted deeply in the current government. For our government treasury to pay out such sums of money and not question it for all these years, one really wonders about so many other areas with large capital expenditure - such as defence, works and so on. To pay RM80 million to one company annually to maintain a local 2000cc V6 car is absurd. Furthermore, to not question it.

The failure rests in the government. They are likely to blame it on the company providing the services, however, someone on the government end, dealing with the procurement of the services of this company is certainly the person that needs to be investigated. The key for the ACA is to find a rat and see how deep the rabbit hole goes. We can be certain that there are many mouths to "feed" for a RM57K maintenance of a single Proton Perdana V6.

The Perdana gearboxes have always been a problem for the car. Testimony from friends and people in general, this is the main complaint. Mechanics will also tell you the same thing. A private mechanic told us that the gearbox is in the region of about 16K to replace - workmanship included. It's madness, because that is about the cost of any european car gearbox. Shouldn't a locally manufactured product be cheaper?

Protons are high maintenance cars. Frequent problems include issues with the electronics, power windows, gearboxes and just overall quality. If anyone chooses to deny this, then it's either they are a Proton owner, by virtue that they can't afford anything more or better, and they have succumbed to the poor standards of our fair nation's sub standard car - not even popular enough to be sold in 3rd world countries. Sad. One may argue that Protons are sold in many countries, but really, the figures are negligible.

Therefore, what is the government doing about it? The company that they have so heavily invested public funds in, by way of bailouts and equity held by Khazanah is not helping them by providing even the government with a quality vehicle that is reasonable to maintain and lives up to the standards and quality of a world class vehicle. Instead, parts are easily 3-4 times more expensive.

The most important thing is what the governement intends to do about the RM80 million that is used to maintain the vehicles. It's far too much, and a large portion of that money can be used to fund better education and opportunities for Malaysians.

We can be assured that this RM80 million for maintaining just 1,400 Perdana V6s, is only the tip of the iceberg.

Sunday July 27, 2008
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 (WRONG!) 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.

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