BMW, Benz possible for Ministry Secretaries
Top public officials including Ministry Secretaries are in luck’s way with their monthly vehicle entitlement being increased to a maximum of Rs. 425,000 (excluding VAT) effective October from Rs. 300,000 earlier. The new September 19 directive – Treasury circular 1/2016 (1) – which also covers officers of equal rank was issued by Treasury Secretary Dr. R.H.S. Samaratunga last week. This makes them entitled to hire luxury vehicles like BMW and Benz which is around Rs. 400,000-Rs.450,000, Toyota Avillion and Prado at Rs. 350,000 or Montero at Rs. 220,000, according to market rates. Normal vehicle rentals in the market range from Rs. 40,000 to about Rs. 100,000, car dealers said. The circular to Ministry Secretaries, Chief Secretaries and Heads of Department is based on a September 13 cabinet decision and revises rates issued earlier in March this year.
The other new monthly rentals of the operational leasing of vehicles are as follows:
- Category 11 – Additional Secretaries/Director Generals/District Secretaries/Chairmen of boards or officers of equivalent capacity: Rs. 200,000 from Rs. 119,500 earlier.
- Category 111 – Senior Asst. Secretaries/Directors or Officers of equal rank: Rs. 135,000 from Rs. 98,700 earlier.
- Category IV – Double cabs as pool vehicles: – Rs. 165,000 vs Rs.158,000 earlier
- Category V – Passenger vans
16 seater: Rs. 170,000 vs Rs. 139,100 earlier In March this year, the Treasury introduced the new rental scheme shifting from the earlier practice (under the former government) of purchasing new vehicles and auctioning it after three years of use as maintenance of new vehicles was too costly. The purchase of vehicles for Ministries, Departments, and Provincial Councils and Government agencies earlier was made through the Consolidated Fund. Under this scheme the Department of National Budget (NBD) would negotiate with the Bank of Ceylon (BoC) and the People’s Leasing Company, a subsidiary leasing company of People’s Bank (PLC), on the terms and conditions of the leasing arrangement relating to purchase of vehicles in accordance with guidelines on procurement of vehicles.
Under the new scheme, vehicle importers say that won’t be any transparency in hiring vehicles as the owners of vehicles can quote any price less than the maximum price to hire their vehicles and the ministry has no expertise to evaluate the condition of the vehicles and category. The reason for the rental scheme is since the Government has to spend a large sum of money on the purchase and maintenance of vehicles obtained for the use of public sector institutions due to high cost of repairs. With a view to overcoming the weakness in the system and reduce unnecessary costs of maintaining a large vehicle fleet by each and every public institution and to enhance the efficiency while promoting the leasing industry in the country, the 2016 budget proposed the
Operating Leasing System’ to hire vehicles on “use and return” option and on a 60-month fixed rental basis. Under this scheme, the lessor will bear charges for the insurance, license, all repair costs and the government will only bear the cost for fuel and drivers. The new system of hiring vehicles from private sector began from March this year and a revision of the maximum monthly rental was made in the September 19 Treasury circular.