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Government to terminate vehicles contract with Avis

‘Mantoetse Maama

MASERU — The government of Lesotho says it will terminate its contract with Avis Fleet Services in the next 24 months as it wants to own and operate its own fleet.
Speaking at a press conference on Thursday, Finance Minister Dr Leketekete Ketso said the government had already put in place a transition mechanism that will see it ultimately taking over the running and management of its fleet.
Avis Fleet Services was in November 2007 awarded a lucrative contract to supply, operate and maintain a fleet of 1 300 vehicles for the government of Lesotho.
The five-year contract expired on October 31.
The decision to terminate the deal followed a damning report by the International Finance Corporation (IFC), a private arm of the World Bank, which recommended an overhaul of the agreement.
In its report the IFC said the government was paying exorbitant tariffs for the “lease of both Full Maintenance Lease (FML) and Management Maintenance (MM) vehicles”.
It also alleged Avis had failed “to comply fully with agreed key performance indicators and to reimburse the government of Lesotho where penalties were due”.
The report also said the government of Lesotho had failed to properly manage and supervise the implementation of the contract and fleet management operations.
Ketso said the report had also unearthed lack of fleet management skills and capacity within the transport departments in the various government ministries.
He said under the new arrangement the government wants to operate its own fleet to “provide transport services in a more efficient and cost-effective manner”.
“It is on this basis that the government of Lesotho has entered into negotiations with Avis for a transition period. The exact length of the transition period is still to be determined but is expected to run between 12 to 24 months,” Ketso said.
The minister added that Cabinet had already appointed four ministers to oversee the negotiations and transition process.
The four who have been appointed to oversee the transition negotiations are Water, Meteorology and Energy Minister Dr Timothy Thahane, Home Affairs Minister Joang Molapo, Justice and Constitutional Affairs Minister Advocate Haae Phoofolo and Ketso.
The transition agreement will put systems in place to properly manage and regulate vehicle costs and increase direct government participation in fleet management operations.
It will also seek to build contract management capacity within government ministries.
Dr Ketso said Avis had over the past five years been dealing with the ministries’ drivers who did not have any skills of managing the fleet.
Dr Thahane said during the previous government when he was Minister of Finance both Avis and government departments were always complaining as they were not happy with the services that were being offered.
“Ministries were complaining that Avis was not giving them replacement vehicles when they were being serviced and it was also charging them a lot of money,” he said.
He said the weakness was that the government was not managing the contract well to see whether the terms of the agreement were being properly followed.
He said under normal circumstances there should have been an independent office to manage the fleet’s operations.
Avis Fleet Services is 75 percent owned by Avis Fleet Services South Africa with 25 percent being owned by a Basotho consortium.

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