The BN Federal Government has to pay vehicle fleet management company RM400 million if it terminates its contract. But the government should not have signed a 25-year agreement with Spanco Sdn Bhd in the first place

Press Statement
by Ronnie Liu Tian Khiew

(Petaling Jaya, Saturday): According to some press reports on May 13, the Federal Government has to pay a whopping RM400 million to a vehicle fleet management company, Spanco Sdn Bhd if it terminates its contract before the deal expires in 2019.

The government pays about RM100 every year to lease and maintain some 4,500 vehicles used by Ministers and top government officials. The deal was
signed in 1994 when Tun Daim Zainuddin was the Finance Minister under the Mahathir's administration.

It was reported in March this year that the Government ordered an audit of the company in December last year and the audited report suggested that it could save about RM30 million annually through a review.

The Government has no merits whatsoever to enter such a lopsided and "scandalous " agreement with Spanco Sdn Bhd in the first place. All it should do was to buy and maintain the vehicles, instead of resorting to leasing which is much more expensive in the long run.

The Government has certainly abused its power by signing a 25-year privatisation contract for at least two reasons: the life-span of any car used by the Ministers or top civil servants seldom exceeds 10 years, and no governments should take for granted that it would continue to rule the country for the next 25 years.

The Prime Minister should immediately direct the ACA to investigate why such a ridiculous contract could slipped through the Ministry of Finance under the ministership of Tun Daim Zainuddin in 1994. RM400 million is no small amount by any standard. It could have been used for other charity projects and educational programs beneficial to the people. The ordinary Malaysian citizens should not be paying for such expensive mistakes made by top government leaders.


* Ronnie Liu Tian Khiew, DAP national publicity secretary