Sunday, September 24, 2023

Decision to outsource Gov’t fleet fueling explained


The government’s decision to outsource the fueling of its sprawling fleet to the private sector was informed by a study that was undertaken, and its believed it will improve service delivery.

On Monday it was confirmed in parliament that the government will be outsourcing the fueling of its close to 12,000 vehicles to the private sector, following identified inefficiencies at the Central transport Organisation, which controls the government’s 33 fueling points. Official data shows that government spends about P350 million annually in fueling its fleet.

Dorcas Makgato, minister of Transport and Communications, said the inefficiencies were functions of insufficient capabilities as a result of increased government fleet as well as changes in the type of fuels that vehicles use.

“Of recent more vehicles use diesel and the distance travelled between fuel points result in vehicles spending time travelling to and from fueling points than enabling service delivery,” she said.

The government’s operating hours were also flagged as a drawback since it adversely affected provision of services, especially during emergencies outside the operating hours, the minister said.

Makgato told parliament that a study commissioned in 2007 to assess options for identified shortcomings, returned with recommendations that fueling of government fleet should be outsourced to the private sector for the CTO fuel points to be privatized in order to improve efficiencies.

“The government prefers to facilitate private sector participation in the economy to promote competition and improve efficiencies, and also to accelerate economic growth by stimulating entrepreneurship and investments by citizens,” Makgato said.

The outsourcing exercise is being coordinated by Public Enterprises Evaluation and Privatization Agency (PEEPA) together with the ministry of Mineral Resources, Green Technology and Energy Security. The outsourcing is expected to work due to the many private fueling stations spread across the country, according to the minister.

Makgatho also revealed that the outsourcing will be done in a phased approach so that service delivery will not be adversely affected. She said the CTO fueling points will be leased to citizens who will be required to fuel government vehicles.

The minister has also downplayed reports that some people might have had inside information regarding the outsourcing of fueling government fleet – as indicated by the mushrooming of private fueling stations. Makgatho explained that these people could have learned of this during the 2007 study, and being speculative entrepreneurs, they positioned themselves for the opportunity.


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