Laikipia County stops car leasing agreement with Toyota Kenya Ltd
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 Laikipia Government has terminated a five-year vehicle leasing agreement signed with Toyota Kenya Limited over what it termed as “opaqueness” of the contract.
Acting Counting Secretary Wahome Koinange told a media briefing that it was not economically viable to honour the lease agreement that was signed in June 2018 by the previous regime.
The leased vehicles include a 20 fleet of Toyota Hilux Double Cabin hired at Sh17,987 a day and one Toyota Prado at a daily cost of Sh41,000.
Going by the figures released by the County Government, a total of Sh721,332,000 would have been spent by the end of the five-year lease agreement. A single pick-up would have cost the taxpayers Sh32,376,600 while Sh73,800,000 would have been paid out for the Toyota Prado.
Mr Koinange said the leasing agreement was signed through a third party and efforts to renegotiate directly with Toyota Kenya has been futile.
He said the county budget is strained and if it honours the terms of agreement, other critical services such as health delivery would be affected.
The official said it was not an abrupt decision and that the county government has in the last two months made efforts to renegotiate the contract.
“The Laikipia County Government team has held several meetings with the Toyota Kenya Limited team chaired by His Excellency the Deputy Governor Reuben Kamuri on September 12, 2022 and September 24, 2022. In the meeting both parties were given an opportunity to raise issues and respond. Sadly, and unexpectedly, Toyota Kenya Limited declined to grant or cooperate on all the reasonable requests made to them by the County Government of Laikipia,” read part of a press statement released to the media.
Leasing agreement
Governor Joshua Irungu has stated categorically that the devolved unit was not willing to continue with the terms of the leasing agreement and had called for renegotiation.
“It does not make sense to lease a vehicle for five years and pay five times its market value in leasing fee and then have the owner take it away. We are not totally opposed to leasing of vehicles but the terms have to be reasonable,” Mr Irungu said during a recent media briefing.
The vehicles have been lying at the governor’s office since he assumed office and were driven out yesterday under supervision of Mr Koinange and other senior County Government officials.
“We feel it is not okay to continue parking these vehicles here as the bills, some of which were not settled out by the previous regime, continue to accumulate. Toyota Kenya Limited have been informed and are waiting for them at their yard as we continue renegotiations,” said the County Secretary expressing optimism that the matter would not land in court over breach of contract.
Acting Finance Chief Officer Daniel Ngumi said the county was not totally opposed to leasing agreements, either for vehicles or medical equipment but it has to be structured in a way that it gives value for money.
“The need assessment for these vehicles was not considered. Why do we need 20 or 40 vehicles including an executive vehicle which will be parked at the governor’s office most of the time?” posed Mr Ngumi.
