Boon for dealers in State’s new 1,410 cars lease plan
Some of the 21 vehicles that have been lying at the compound of Laikipia Governor's office and which were driven back to Toyota Kenya Limited Yard after termination of a five-year-leasing contract.
The government has invited lease deals for 1,410 vehicles, presenting a boost for motor dealers who have reaped from the multibillion-shilling programme now in its seventh phase.
The search for new lessors follows the expiry of the lease on some 1,408 vehicles hired out during the fourth phase of the programme in May.
The National Treasury had leased 1,408 vehicles for use by the national government administration, the National Police Service (NPS), Nairobi Metropolitan Services (NMS), and Kenya Prisons Service for four years.
Successful dealers in the new deal will lease the vehicles to the government for four years with an option for extension by a further three years.
Sh3 billion
“The government, therefore, intends to replace all the vehicles under the above phase for a period of 48 months with an option of an extension for a further period of three years,” said the Treasury in a tender call.
The vehicle-leasing programme was introduced by the Mwai Kibaki government in the financial year 2010/2011 although it took effect in the 2013/2014 financial cycle when the National Treasury allocated Sh3 billion to lease 1,200 vehicles for the police service.
The Treasury has so far leased 6,800 vehicles through the initiative in six phases.
The first phase saw the government lease 1,280 vehicles, 1,520 vehicles were hired out in the second phase while 500 vehicles were leased in the third phase between January 2017 and October 2021. Further, 1,380 vehicles were leased in the fourth phase and 2,120 in the sixth phase which ends in October 2025 from October last year.
Leasing programme
The government was hoping to use the leasing programme to get vehicles for its operations at cheaper costs and unlock funds for other critical public spending. It was also aimed at helping establish Kenya as a source vehicle market for the wider Eastern African region by encouraging vehicle assembly, boosting the secondary market of vehicles coming off lease, and helping to reduce the importation of second-hand vehicles.
However, a recent study commissioned by the Treasury shows the government has failed to attain the estimated savings target, revealing that only a total of Sh638 million was saved in nine years under the vehicle leasing deal.
This translates to about Sh70 million saved on average per year against some Sh4 billion that the government said it would save through the programme.
Under the lease scheme, the government has over the years hired cars from dealerships including CMC Motors Group Limited, Toyota Kenya Ltd, DT Dobie &Co. Ltd, Simba Corporation Ltd, Isuzu EA Limited, Ecta Kenya (Subaru) Ltd, Crown Motors Group Ltd (Nissan) and Urysia Ltd (Peugeot).
