Polokwane Municipality sets aside R119m to replace ageing fleet
The Polokwane Municipality has unveiled a multi-year plan to address vehicle fleet challenges, with major changes and millions allocated over coming years.
POLOKWANE – The Polokwane Municipality has set aside R119.7m for the replacement of the bulk of its vehicle fleet over the next three financial years and additional funds will be sourced to cover the last two years of a proposed five years’ lease.
According to a report that was tabled during the council meeting last Friday, amounts of R37.4m, R39.4m and R41.6m will be budgeted for the 2025/26, 2026/27 and 2027/28 financial years respectively to replace the municipality’s existing fleet of 641 vehicles and allow for growth.
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The fleet consists of a mix of vehicles and includes 225 vehicles that are still under dispute in the Fleet Africa contract and includes sedans, bakkies, trucks with crew cabs, tractors, water tankers and a 15-seater bus.
The procurement of new vehicles is motivated by the fact that most of the vehicles that were procured during 2018 have reached a stage at which they are unable to respond to service delivery requirements. All the units are way over due for replacement and currently result in a high occurrence of breakdowns and down-time, affecting service delivery, according to the report.
Various options have been explored as part of a due diligence process in order to ensure that the vehicles are provided to the municipality in an efficient, cost-effective and sustainable manner.
The options included outright purchase through the national government’s RT57 tender that is available to all organs of state.
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The advantage of this method is that the local authority obtains full ownership of the goods, contract disputes will be unlikely and fleet units will be readily available throughout the term.
The disadvantages are, however, that it is capital intensive, maintenance and other cost obligations are for the municipality’s account and the assets are depreciated.
The preferred option is a full maintenance five years’ lease and it has the advantage that it includes the vehicles, covers maintenance and insurance, licensing, support management and driver behaviour excluding repairs due to negligence and driver error.
This option will allow 98% availability, there will be no residual value risk and it will improve the municipality’s cash flow management.
The disadvantages are that the municipality does not retain ownership of the goods after expiry of the contract.
