Imperial Holdings wins R2-bn contract
OUTGOING MINISTER of Transport Mac Maharaj last week signed a R2-billion, six-year contract with Imperial Holdings to provide motor transport services to four national government departments - transport, labour, health, water affairs and forestry.
Maharaj said the decision to outsource part of Government's needs for motor transport was driven by transport's policy to introduce competitive practices that would also ensure government got value for money, and was in line with his department's policy to establish public-private sector partnerships for the provision of services.
The significance of this initiative is that the Department of Transport, in consultation with the nine provinces, has recognised that the provision of government transport is not a core business function of government and is better placed within the private sector which is better equipped to shoulder and manage the risks.
The contract will allow for the improvement in management controls and authorisation procedures which, it is envisaged, will lead to a 20% reduction in fraud, particularly in km abuse, unauthorised use, unnecessary servicing and overcharging, and a further 10% reduction in the duplication of services.
Imperial will purchase existing vehicle assets of the departments for R80 million.
The contract is for a six-year period with an annual value of R350 million.
By Anna Cox
Copyright Now Media (Pty) Ltd
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