Home | Search | Links | Contacts | Feedback

Although all privatised companies in Lesotho such as Telecom Lesotho, AON Lesotho, Lesotho Brewing Company, Lesotho Flour Mills and Lesotho Bank were bought by foreigners, no other privatisation process has attracted as much public comment as the privatisation of PVPS for whatever reasons. It was with this thoughts in mind that On Monday 23^rd July 2001 I has an interview with the Marketing and Public Relations Manager of Imperial Fleet Services, Mr. Lerato Litabe. The purpose of the interview was to find out the benefits that the privatisation of the former PVPS has brought for the Government of Lesotho.

In addition, the intention was to find out how the new company, Imperial Fleet Services is being managed. But to understand how privatisation of PVPS came about it is appropriate at this stage to highlight some of the problems that led to the privatisation process.

Inefficiency of the system Before Imperial Fleet Services took over the management of government fleet, there were no systematic records of total number of government fleet; no record of removable components that each vehicle brought in for repairs had. Even worse, numberplates of cars were usually removed when major repairs had to be undertaken by sub-contracted garages in South Africa.  Removal of the number plates was made deliberately to prevent identification of vehicles belonging to private individuals from those belonging to the Government of Lesotho.

Insurance Cover Government vehicles did not have any insurance cover except third party insurance. This resulted in huge expenses for the Government as evidenced by the number of vehicle involved in accidents which have been declared write-offs.

Control of Vehicles Controls of vehicles entering and leaving the PVPS premises was almost non-existent leading to theft of cars, spare parts and tools. Rampant theft of car components was evidenced by the high depletion of stock within a short period. There was no thorough check at the entrance or exit of drivers to identify whether the driver possessed the correct identification. The system of parking cars was haphazard and the premises had an untidy appearance which evidenced bad management. Even the car keys were not properly tagged to afford easy identification of vehicles to be collected. It was common for illegal multiple refueling of vehicles in a single day arising from theft of petrol. Whole sets of tyres went missing from new cars and nobody bothered to check. It became a custom for drivers of vehicles being taken for repairs to remove the car radio since it was common knowledge that car radios went missing

Between April, 1998 and February, 1999 the actual cost incurred by the old PVPS which are known to Government amounted to M48, 331, 911.00. However, there are other hidden costs which the Government is unable to account for which include thefts of vehicles and their components such as batteries, abuses of vehicles, vehicles involved in major accidents which were declared write-offs, overcharging of maintenance of vehicles and thefts of fuel from government vehicles by drivers and government officials.

The Selection of Imperial Fleet Services The process of bidding was transparent. Advertisements were sent to newspapers with deadlines for submission of tenders stipulated; three companies bid for PVPS and the process of evaluation for selecting the most suitable candidate resumed. Imperial was the most successful and negotiations started followed by a contract signed between the Government of Lesotho and Imperial Motors. Rumors flying about the bidding process which is not transparent are inaccurate and probably reflect the bitterness of individuals who benefited for the endemic corruption that took place during the bad old days of PVPS.

Imperial is a subsidiary of Imperial Holdings and includes car rental services with branches in Swaziland, Botswana, Namibia, Zambia and South Africa. A Company of this magnitude would not associate itself with shady dealings, as this would reflect negatively on its image. Company audits are carried out annually in August to determine whether profits were realised and if not, where improvements need to be effected. Thus even employees were oriented on the culture of a passion for their job.

When Imperial took over the management of Government Fleet, the following improvements were made:

Control of Fuel Theft Imperial Fleet Services has installed a computerised system called Fuel-O-Mat which links Engen Filling Station with Imperial Fleet Services. The purpose of installing the system is to control and prevent theft of fuel by drivers and government officials. When filling the petrol, the system immediately indicates the Department/Ministry to which the car belongs; the last date of refuel; and the number of kilometers traveled.

Attempts have already made by Government drivers to tamper with the system. Tampering causes the computerised system to jam, resulting in inability to refuel the vehicle. When the vehicle is taken for repairs to enable the system once again, Imperial Fleet Services notifies the transport officer of the ministry in charge about the tampering; the system is once again enabled and the costs incurred are borne by the Ministry to which the vehicle belongs. The system has resulted in huge savings on the part of Lesotho Government account on petrol consumption.

Maintenance When a government vehicle is taken in for repairs, a record, which is signed by Imperial Fleet official and the driver of the vehicle, is made of tools, a radio, a spare wheel, a jack, and any other components of the vehicle that may be removed. All vehicles to be repaired are tagged with a red tag before being tested and parked in a designated area. After maintenance, the vehicles are tagged with a green tag and parked in a different designated area. This separation helps to keep track of cars brought in and those to be collected. Spare parts from vehicles involved in accidents are salvaged and sold off.

Major repairs are outsourced to garages within Lesotho and outside the country. But a thorough check is made on maintenance standards of a garage before a garage can be selected for outsourcing. The check also includes the qualifications of mechanics employed by the garage.

After repairs are made on a vehicle, it has to pass the quality control checks made by Imperial Motors to determine whether maintenance has been carried out accordingly. Any discrepancy (e.g. fitting of second hand spare parts) in maintenance results in a letter of warning to the garage owners. Repeat of such an incident results in Imperial motors terminating the contract with the said garage.

Revenue accrued to Government During the period from April, 2000 to February, 2001 when Imperial Fleet Services was operating at the old PVPS premises, the following amounts were paid to the Government of Lesotho:

·        M8,518,223.00 for Corporate Tax

·         M1,737,051.00 for Income Tax

·        M47,637.00 for Fringe Benefits Tax

·        M4,460,337.00 for other taxes

·        M1,557,936.00 for renting PVPS premises

The total amount paid to Government amounted to M16, 321,184.00

As the Government of Lesotho has 20 percent shares in Imperial Fleet services, it is therefore entitled to benefit in the profits made by the company. The estimated profits for this financial year are around M16 million. The Government’s share of this amount is estimated at M3.4 million. The sale of Government vehicles to Imperial Fleet Services amounted to M72 million, with an estimated M10.9 million spent for the purchase of other activities and operation formerly used by the old PVPS.

Responding to concerns  that  were raised by the GS Task Force, Imperial Fleet Services reacted as follows:

Costs for services from Imperial Fleet services are too high

We do not agree that Imperial is necessarily expensive because here are no records from PVPS to indicate what the Government was spending on a monthly basis at that time. But the costs incurred usually exceeded what is reflected in the budget. Costs related to accidents involving Government vehicles which occurred are missing. Hence there is no way of comparing whether Imperial Services is more expensive or not. (See attached page).

Imperial has shown low workmanship standards in the maintenance of vehicles

It is possible that in some cases maintenance may not have been carried out as required. When the particular vehicle has a “return job” as it is termed, it is given attention. In cases where the job was sub-contracted to other garages locally as specified by the contract, an investigation will be made to find out why the vehicle was not repaired according to required standards. In cases where the repair job is major, the vehicle is returned back to the dealer. But the return jobs are not more than 10 percent of all maintenace on average.

Long maintenance and repair periods is the order of the day, thereby forcing ministries to go for costly short-term hire.

This  allegation is not accurate. Usually, a vehicle coming for maintenance is given a maximum of 4 to 5 days after which a complaint may be made to Imperial Motors for long maintenance. An investigation will be made to determine the nature of repair job required. In cases where a spare part is needed and may take a long time to obtain, Imperial will lend its own vehicle to the particular complainant.

In cases where the vehicle was broken down due to negligence (not servicing the car after the specified mileage), the Ministry will have to  incur costs of hiring a vehicle. In cases of normal service, a car may be brought in and will be collected the same day. But because of the size of the Government fleet, this may take a couple of days.

In some cases the driver will not collect the car deliberately, aware of the fact that Imperial Motors will be blamed for long maintenance. The intention here is to afford the driver some free time to attend to his private business. There is evidence of a communications breakdown between the head of department, the transport officer and the driver in Government departments.

The incident of Ministry of Works hiring a vehicle (Y 9861) for 5 days in September last year for the amount of M12, 169.80 is totally false. Imperial Fleet Services cannot take a vehicle belonging to one Government department and hire it to another Department. It was also mentioned that 8 vehicles belonging to ministry of Works have been in breakdown since August 2000. The statement is totally false.

What our invoices indicate are two trucks from LCU that knocked down their engines. Investigations by IFS experts revealed that the two trucks had engine breakdowns because they were abused. When told to pay the costs for the trucks, Ministry of Works opted make their own independent assessment on their trucks which has not materialised to date.

There is shortage of parts for categories A and B vehicles

All spare parts are available in Imperial Fleet Services. In some cases where vehicles brought in for servicing are imported models, a spare part will have to be imported for that particular model and this usually takes about 4 to 5days.

How many former employees of PVPS were absorbed by Imperial Fleet Services?

All staff in the districts were former employees of PVPS. Around 40 percent of the staff in Maseru including all accounts staff were former employees of PVPS. There was no binding clause in the contract that stipulated that Imperial motors should hire staff from the former PVPS after retrenchment.

In practice Basotho have no managerial and decision making powers

There are 4 Basothos in senior management working hand in hand with 4 foreigners. It is not true that the locals are not occupying decision-making positions.

Is preference given to local suppliers with respect to outsourcing?

The contract between GOL and IFS stipulates that 30 percent of maintenance may be outsourced to locals. But in practice an estimated 70 percent is outsourced to local garages and we can prove it through the monthly reports and graphs (see attachment of summary of all outsourcing in March, 2001).

Representatives from Imperial Fleet Services dominate the Board of Directors.

That is normal because Imperial Fleet Services owns the majority shares of 80 percent. Hence board representation will be in proportion to the shares owned.

Abuse of vehicles by Imperial Fleet Services staff

This relates to the employee of Imperial Fleet Services who went to lunch at his house in Mohalalitoe driving a vehicle with registration number X 7956. It may be possible that a mechanic who took the vehicle for road test decided to go to lunch. Since the date has been indicated and we have records of cars coming in and going out at our main gate, we will investigate this allegation and disciplinary action will be taken against the individual. Part of the reason why employees of Imperial Motors must use private numbered plates is to avoid situations where these types of accusations may surface.