Govt to maintain value of vehicle fleet in next concession

The new 15-year contract will involve 12,500 vehicles, with an estimated value of RM300m annually starting after the 5th year

by SHAHEERA AZNAM SHAH/ pic by RAZAK GHAZALI

THE value of the government’s vehicle fleet contract is expected to be maintained at similar levels under the next concession, which is due to be announced by year-end.

While a final decision on the new concession has yet to be made, the administration “need(s) to get around to it very soon” as the current concession will expire in December 2019, Deputy Finance Minister Datuk Amiruddin Hamzah (picture; right) said.

“We have extended the contract just to make sure we have a new company to manage the fleet.

“I don’t have the figures of how much the value will be…but it (will) be comparable to the concession of the previous holder,” he told reporters at the inaugural Inceif-Isra annual conference on Islamic Economics and Finance (I-Arief) in Kuala Lumpur yesterday.

The government is keen to appoint a new holder for the fleet concession before the year ends in order to keep operations running smoothly, Amiruddin added.

“The ‘NewCo’ has to come in and provide the service commencing early next year,” he said.

According to a report by a local newspaper, seven companies are currently bidding for the fleet management contract to supply and manage official vehicles for the government.

The contract includes supplying cars used by ministers, deputy ministers and high ranking officers.

It was reported that the new 15-year concession will involve 12,500 vehicles, with an estimated value of RM300 million annually starting after the fifth year. For the last 25 years, the government’s vehicle fleet has been solely managed by Spanco Sdn Bhd, of which tycoon Tan Sri Robert Tan Hua Choon is a shareholder.

Spanco was given an extension to manage the fleet until December 2019, after its 25-year concession ended last year. The company has reportedly confirmed it’s seeking a new contract.

Separately, Amiruddin said Bank Negara Malaysia (BNM) is looking into a virtual banking framework, which will “probably be ready next year”.

“However, before that, it needs to go through public comments. There are enquiries on fully digital banks. Let us wait for the framework to be ready to get some feedback,” he said.

Presently, there is no criteria imposed on industry players who wish to join the virtual banking sector in Malaysia.

“The government is open to both local and international financial institutions who are interested to establish a virtual bank in Malaysia,” Amiruddin said.

Virtual banking, seen as the next frontier in financial services innovation, has been highly anticipated in a sector currently dominated by well-established institutions, he added.

BNM governor Datuk Nor Shamsiah Mohd Yunus previously said virtual banking has already taken place in Malaysia, with the licensing framework to be issued for public consultation by year-end.

In June, BNM financial development and innovation department director Suhaimi Ali said 50% of the framework has been finalised, while 10 parties have expressed interest in establishing a virtual bank in the country.

Last year, financial transactions conducted through mobile banking channels more than doubled to 257.4 million transactions valued at RM100.1 billion.

There are an estimated 240 financial technology companies in Malaysia, of which 40% are in the payment system industry.