Kenya revs up new plan to lease vehicles for use by civil servants
The government is preparing to stop buying motor vehicle for its officials in a move expected to save the taxpayers at least Sh3.5 billion every year.
In an ad, the Ministry of Finance on Thursday invited players in the motor vehicle and leasing industry to apply for provision of vehicles and transport services though leasing on trial basis.
As a concept, leasing allows one to an uninterrupted service of an asset without owning it but periodically paying for use.
Three-day long meeting
“There is going to be huge savings for the government with the money saved shifted towards development projects,” said Vehicle & Equipment Leasing Ltd chief executive, Mr Paul Njeru.
The government’s call for expression of interest follows a three-day meeting involving State officials, an international consultant retained by the Treasury to help in formulating leasing policy, and industry players, where the latter made a case for leasing.
The government will be joining Supermarket chain Nakumatt, Kenya Shell, East Africa Breweries Ltd, Bamburi Cement and soft drink maker Coca-Cola, which are currently the largest consumers of leased motor vehicle.
On the supply side Simba Colt, Ryce Motors, Toyota Kenya, Rentworks East Africa and Vehicle & Equipment Leasing are the key players.
“This is the right way to go,” Mr Robert Nyasimi, a former chair of Leasing Association of Kenya, which has been lobbying the government to switch from buying motor vehicle to leasing, noted.
Experts say that if the government was to increase the uptake of leasing services by 25 per cent the multiplier effects on the overall economy could see the country wealth grow by an additional 10 percentage points, making the achievement of Vision 2030 almost a reality.
Leasing will also help Kenya to triple the number of cars it buys every year, helping in service delivery.
Under the pilot project, the government intends to lease 1,500 vehicles of different makes and models, ranging from 1300cc to 3500cc including saloon, utility and commercial vehicles of up to 15 tonnes.
The cars are expected to cover, on aggregate, over 30 million kilometres annually and will be used mostly in the Ministries of Agriculture, Fisheries and Livestock known to require extensive use of vehicles.
Outsource related services
In addition, the government will be leasing about 300 ambulances expected to make 22,000 referrals covering approximately 11 million kilometres annually as part of the pilot project.
The government will also outsource related services such as insurance, scheduled and unscheduled maintenance, replacement of non-functional vehicles, and supply of fleet management systems.
