Govt splashes $6m on cars

via Govt splashes $6m on cars – DailyNews Live by Fungi Kwaramba  17 OCTOBER 2013

Mugabe’s administration is buying 100 new fuel-guzzler vehicles from high-flying auto dealers in Harare for over $6 million at a time millions are facing starvation.

The Ford Ranger vehicles, part of the new Zimbabwe government fleet, will likely be purchased from either Croco Motors or Duly’s, all of which have an existing contract with the government.

Government, through CMED (Pvt) Ltd, which procures and services government vehicles, has floated a tender which has caused consternation in the car trading industry, amid speculation the tender will likely benefit only Croco and Duly’s.

On the local market, the Ford Ranger double cabs cost anything between $50 000 to $60 000.

This means government will spend about $6 million in funds from a supplementary budget that will be approved by Parliament soon to buy the 100 commercially available fuel-guzzling vehicles.

“CMED (Pvt) Ltd invites tenders for the supply and delivery of 100 X Ford Ranger D/cab vehicles,” says a special formal tender floated by the CMED managing director on October 6.

“Tender documents are obtainable at CMED (Pvt) Ltd head office, procurement office, corner Herbert Chitepo and Rekayi Tangwena, Harare at a non-refundable fee of $10.

“Tenders must be enclosed in sealed envelopes and endorsed on the outside with the tender number, the description, the closing date and must be posted in time to be sorted into Post Office before 1000hrs on Tuesday 29 October 2013.

“Companies intending to submit a tender are advised to read the invitation to tender document carefully so that they are familiar with the nature and extent of their obligation on their company if accepted.”

Charles Kuwaza, State Procurement Board chairperson,  was unreachable for comment as he was not picking up his phone yesterday.

Critics immediately blasted government for floating a tender that may benefit only two companies, saying government should have purchased a new fleet of fuel-efficient vehicles to increase demand for struggling auto companies and stimulate the local economy.

Government has reportedly directed the CMED administration to speed up planned purchases of vehicles for its fleet.

This will be the largest one-time purchase of hybrid vehicles for the government fleet this year.

Government will spend more to buy advanced technology for the government fleet.

The purchase of the imported vehicles comes at a time Willowvale Mazda Motor Industries, Zimbabwe’s largest car assembly plant, is struggling under the weight of crippling debt and declining sales volumes caused by a spectacular meltdown in its diversified motor industry that has put 210 jobs at risk.

The government owns Willowvale through the Industrial Development Corporation, which has a 75 percent stake in the car dealer through Motec Holdings Private Limited.

Parliament’s Portfolio Committee on State Enterprises and Parastatals Management on Industrial Development Enterprises, has recommended an urgent bail-out for the firm, but the calls seem to have fallen on deaf ears.

Although the company has vast machinery at its disposal, there is no production taking place and the workshops are deserted, leaving the company with no option but to pay idle workers and other unavoidable fixed costs.

Ahead of this purchase, the Zimbabwe Congress of Trade Unions (ZCTU) demanded that government procures locally manufactured vehicles for newly-elected legislators and cabinet ministers to promote the local automotive industries.

ZCTU, the largest labour federation in the country, said government had in the past opted for imports while depriving the local manufacturing industry, which is failing to grow due to under-funding.

“These industries are in dire straits and need our support,” said Japhet Moyo, the ZCTU secretary-general in a statement to the media.

“It does not make sense for our leaders to continue exporting jobs by buying cars from abroad.

“The buying of cars from the local manufacturers will go a long way in supporting and promoting our industries and thereby creating employment for citizen.”

In a country where the car industry has wilted significantly due to economic contraction over the last decade, most car dealers are struggling.

The struggle for the few available customers, who include government, thus remain intense among the top car dealers in the country, who include Amtec and Amalgamated Motor Company.

With the tender specifying the supply of Ford Rangers, most car dealers who specialise in other models say they have been technically elbowed out of the lucrative deal.

“A tender in our industry should not be model specific but this one is, meaning we cannot compete,” a Harare-based car dealer told the Daily News, speaking on condition of anonymity, fearing prejudice in the tender.

“This is hard to take considering that government has been our biggest customer.”

The intended purchase of the off-road monsters is likely to further rock the boat for the government which is accused of focusing on perks for ministers and government officials while turning a blind eye at the plight of poorly paid civil servants who have been clamouring for a pay review.