Tan Sri Vincent Tan sues the Malaysian government, Spanco over Naza-Berjaya losing the franchise contract

Tan Sri Vincent Tan has filed a lawsuit against the government and fleet management company Spanco over a fleet franchise agreement worth millions of ringgit that was lost by Naza-Berjaya after the group has been empowered for itthe New Straits Times report.

According to the founder of the Berjaya consortium, the Naza-Berjaya consortium was selected by the government to handle the previous administration’s fleet franchise through a letter of intent (LoI) issued in 2019.

The group was set to replace Spanco as a fleet management service provider, but the move never came to light, with Tan saying the government had terminated its agreement with Naza. -Berjaya unfairly before the actual prize is announced.

As such, the corporation is seeking justice through legal means. “We have filed a lawsuit against the Ministry about this and are waiting to go to court this year. You will hear more about this in the future,” he said earlier today.

In February 2019, government calls for proposals for its official fleet supply, maintenance and management contract for the next 15 years. Proposals have reportedly been received from at least seven companies for new concessions.

In addition to the Naza-Berjaya consortium, formed in a 51:49 partnership to bid for the contract, other contractors include Sime Darby, DRB-Hicom, Samling Group, Comos and Go Auto as well as existing suppliers. at Spanco.

According to Tan, the Naza-Berjaya group won the bid with the lowest offer price. “We won the contract as the lowest bidder and received the LoI. But then the government changed and Tan Sri Muhyiddin Yassin became prime minister. Three months later, we received notice that our LoI had been terminated,” he said.

Tan said the government then awarded the contract to Spanco, although the Naza-Berjaya bid was RM700 million cheaper than Spanco. He questioned why the government had agreed to pay an additional RM700 million for that deal. “Maybe the new government thinks Berjaya and Naza are not good enough in auto maintenance or in the auto business,” he suggests.

He said the group has changed the shareholder agreement, raising Bumiputera’s ownership in it to 60%. “Berjaya’s stake is now down to 40%. Hopefully we will get a favorable outcome from the court’s ruling,” he added.

Spanco was awarded a government contract for comprehensive management of fleet management in 1994. Their 25-year franchise agreement ended in December 2018, but the company was renewed twice, each six months in 2019 to continue administration until the end of that year, with a third extension thought to be through June 2020.

The fleet of government vehicles, all leased through a 5-year replacement cycle agreement, includes vehicles used by top ministers and civil servants, as well as police patrol vehicles . The 5-year replacement cycle ensures that the government fleet is always up and running, with the maintenance costs of each of these vehicles limited to a predetermined limit.

While the value of the new concession has never been revealed, it is estimated that, based on the current 12,500-car fleet in 2020, the contract could be worth RM300 million a year from year five. onwards

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