In the three years since the City of Johannesburg took the step of outsourcing its vehicle fleet, it has saved taxpayers R357-million and plans to save even more.
The vehicle fleet has been outsourced to FleetAfrica, listed transport company Super Group’s fleet-management business.
This information is contained in a report presented to the Johannesburg City Council by Ian Davies, compliance manager of the city’s contract management unit.
According to a statement issued by Super Group on Tuesday, the report outlining the FleetAfrica operation for the year 2003 indicates that there has been a significant improvement in the overall management of the fleet, availability of vehicles as well as a remarkable reduction in the size of the fleet.
“Before the city outsourced its fleet services there was an estimated 40% availability of vehicles,” Davies said.
“The outsourcing contract aimed at raising this to 90%, through a mix of services and replacement vehicles administered by FleetAfrica. However, it has managed to raise availability to 98%,” he added.
Davies said that 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 is to attain the maximum utilisation of the vehicles,” he advised.
“At present all risk is outsourced but I strongly believe we can get a further 20% saving on our fleet if the city also takes on some of the risk. This, despite the threat of hijackings, accidents and other incidents that inevitably occur to vehicles operating within Johannesburg as well as the increases in petrol price, insurance, prime lending rates and inflation.”
The city’s fleet was the first municipal operation to be outsourced and Davies said there has been continued interest by local and national governmental departments after seeing the benefits that the city is reaping.
“Initially, outsourcing was considered a big risk but it is now a success story and we are all very proud of what we have achieved,” Davies stated.
Super Group chief executive Larry Lipschitz said that the City of Johannesburg contract is an example of the efficiencies that can be achieved by fleet-management expertise.
“I would also like to commend the City of Johannesburg for its bold vision in trusting us with the ownership and management of its fleet, thereby providing the people of the Johannesburg with a world-class service.”
Lipschitz pointed out that the recent empowerment transaction with the Peu Investment Group is the most significant initiative within the industries in which Super Group operates.
In terms of this transaction, Peu, together with previously disadvantaged employees, will acquire an equity holding of 25,1% of Super Group and have the right to appoint a minimum of 25% of Super Group’s board of directors and participate on all committees that influence the operations and strategies of the company. — I-Net Bridge