July 3, 2003
By Thomas Thale
THE outsourcing of the City of Johannesburg's fleet of vehicles has resulted in city vehicles being more roadworthy and readily available, whilst saving the city millions of rands.
This assessment is contained in a report tabled before council recently by the Contract Management Unit (CMU) of the city. According to the report, it was initially estimated that the contract would cost the city some R480-million per annum.
Fleet Africa, a division of Super Group, was awarded a five-year contract to supply and maintain vehicles used by various city entities in February 2001.
The actual cost in the first two years of the contract dropped to R316-million in 2001/02 and R347-million in 2002/03, saving the city well over R130-million per annum.
The company has supplied vehicles to various city departments and some Utilities, Agencies and Corporatised entities (UACs) and seen to their maintenance, insurance, fuel supply and related services. The contract has resulted in city workers operating a newer fleet which is better maintained.
Ian Davies, manager of outsourced contracts in the CMU, says the city was motivated by a need for "an effective, efficient and well maintained fleet to ensure effective service delivery to the people of Johannesburg" in outsourcing its vehicle fleet.
Davies says the availability of vehicles has increased remarkably from less than 40% before the contract to the current 97%. This is despite the actual number of vehicles in operation being reduced from a base of 5992 before the contract to the current 3737. This figure excludes trailers that have been provided for as Maintenance Managed Vehicles (MMVs).
These Maintenance Managed Vehicles remain the assets of the City but are maintained by Fleet Africa on behalf of the City and its entities. Davies ascribes the increased availability of vehicles to the improved efficiency of the management of the fleet by both the City's respective fleet managers and its outsourced partner, Fleet Africa.
"We can now keep vehicles on the road for much longer than before," says Davies.
Fleet Africa has supplied Metro Police with new vehicles, including Surface and Freeway patrol vehicles and 2X4s and Emergency Management Services with new emergency vehicles, including ambulances, Brontos Skylifts and state-of-the-art Pumper Tankers.
The company is also responsible for meeting the fleet services needs of companies such as City Power, City Parks, Joburg Water, JHB Roads Agency and Pikitup.
The contract makes provision for vehicles leased to be on the road for between two years and five years, depending on their weight.
"All vehicles with a gross vehicle mass of 3 500 GVM or less are replaced within two years, and the rest are used for five years," explains Davies.
The city has also saved substantially on insurance premiums. "Last year, our insurance premium was calculated at 8,15 % of the capital value of vehicles. This year, the rate has gone down to 7,29%," says Davies. "This low rate indicates the good performance of the user groups." This is despite insurance premiums in the industry going up substantially in recent years.
Davies says vehicle maintenance has gone up by 17%, indicating that vehicles are now being serviced.
A major concern noted in the report relates to theft of vehicle parts. In the 2002 / 2003 financial year, theft of parts cost the city R697 8961, a huge increase compared to the R141 289 lost for the period 2001 / 2002.
According to Davies, items which get stolen from council vehicles include jacks, rims, tyres, seats, engine parts, steering wheels, number plates, petrol caps and warning triangles.
The theft of vehicles has however, been kept to a minimal. This, says Davies, is partly because all council vehicles are now fitted with tracking devices. Among the vehicles lost were those belonging to the metro police.
The city's police force had one car stolen in 2001 and two last year. Two metro police vehicles were hijacked in 2001. "Don't read too much into that. It could be unmarked cars that get hijacked," says Davies.
