June 18, 2004
By Chandrea Gerber
IN the three years since Johannesburg took on the innovative risk of outsourcing its fleet of vehicles to Fleet Africa, it has saved taxpayers R357-million and has plans to save even more, according to a report presented to council.
"This speaks volumes about how the City is managing the fleet and the costs involved," says Ian Davies, compliance manager for the contract management unit of Johannesburg.
The report outlining the Fleet Africa operation for the year 2003 indicates there has been a marked improvement in the overall management of the fleet, availability of vehicles as well as a remarkable reduction in the size of the fleet.
"User groups are starting to critically analyse their vehicles," Davies says, and this allows for better management of the vehicles.
Before the City outsourced its fleet services, there was an estimated 40 percent availability of vehicles. Though the outsourcing contract aimed at raising this to 90 percent, through a mix of services and replacement vehicles administered by Fleet Africa, it has managed to raise availability to 98 percent.
"We went from 4 882 vehicles at the outset, to the current figure that is below 3 000. That is very significant," says Davies. The number of fleet vehicles currently stands at approximately 2 893 vehicles, excluding maintenance management vehicles which belong to the City.
Davies says for the first three years of the contract, the City focused on getting a grasp on outsourcing. Now, the task for the remaining two years of the contract, which expires in 2006, is the utilisation of the vehicles.
The City transferred ownership and management of its fleet and services to the private sector, Fleet Africa (previously Super Fleet, a division of Super group) in 2001, in line with its vision of giving the people of the city a working service with world-class delivery.
"I strongly believe we can get a further 20 percent savings on our fleet if we tackle this issue," says Davies, despite the risks of hijackings, accidents and other incidents that inevitably occur to vehicles operating within Joburg, and despite the increases in petrol price, insurance, prime lending and inflation.
Davies says that at present all risk is also outsourced, but hopes that by 2006, the City will also take on some of the risk to reduce costs further. But first we must get fleet governance in line," he explains.
The City's fleet was the first municipal operation to be outsourced, and Davies says there has been a continued interest by both local and national governmental departments after seeing the benefits the city is reaping.
He says that at the outset, the city took a big risk, but that those risks paid off. "This was chosen as one of the city's innovation projects, which looked at all the projects within the city. This is a success story. And we are all proud of what we have done."
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