State officials to be given hiring cars
View(s):The Government will suspend the purchase of new vehicles for ministries, state institutions and agencies and instead allow the hire or brand new or unregistered vehicles. Hiring will be permitted for vehicles with a mileage of less than 1,000 km through operational leasing method (use and return option) for a 5-year period on a fixed monthly rental basis ranging from Rs.139,100 to Rs. 300,000, the national budget circular No:1/2016 issued by the Treasury has revealed. This decision has been taken by the Finance Ministry as a cost cutting measure. The Treasury will call for bids from service providers to hire vehicles. A standard procedure would be followed for this purpose following the identification of the required number of vehicles for all state agencies including ministries and government departments.
This decision was announced at a high level meeting held at the Finance Ministry in Colombo and it was reported in Business Times on January 17, 2016. Secretaries to the ministries or officers of similar grade could obtain cars with engine capacity of 1300 CC to 2500CC with a monthly rental of Rs. 300,000, and Additional Secretaries, DGs, District Secretaries, Chairmen of Boards or officers of similar grade the rental would be Rs.119,500. According to Treasury guidelines, the monthly vehicle rental of Rs. 98,700 was fixed for Senior Assistant Secretaries/ Directors or officers of the same grade. State agencies could hire Double Cabs as pool vehicles at a monthly rental of Rs. 158,000 and 16 Seater passenger vans at Rs. 139,100.
The Treasury has imposed the ceiling allocation on monthly hiring charges as well as types of vehicles permitted be hired, a senior official said adding that this would reduce millions of rupees being paid as installments and interest for the procurement of vehicles under the earlier leasing arrangement with the Bank of Ceylon (BoC) and the People’s Leasing Company, a subsidiary leasing company of People’s Bank. Earlier payment for vehicles either purchased or leased for Ministries, Departments, Provincial Councils and Government agencies came from the Consolidated Fund. The practice of buying vehicles for government agencies once in every three years by the Treasury is unbearable for a country like Sri Lanka, an economist who wished to remain anonymous told Business Times. He said that a brand new vehicle could be used in good condition for at least five years even it depreciates 10 per cent per annum.