Car Fleets – Costing

Collectively, provinces own 40,000 vehicles, and provinces manage their fleets in one of two ways: some have centralised fleet management through a dedicated trading entity while others have departments manage their own fleets. Differences in provinces’ size and their approach to delivering public services result in significant differences in the size of the vehicle fleet relative to the number of government employees and in comparison to the provinces’ populations: there are almost 33 government employees for every vehicle in Gauteng, but only 13.5 for every vehicle in the Northern Cape, but, while, there are about 360 people in Gauteng for every vehicle owned by the provincial government, the ratio of vehicles to population is less than a quarter of that in the Northern Cape. The provinces spent R2.8 billion on managing and operating their fleets in 2016/17, a figure that has risen by a little less than 6% a year over the previous two years. In that period the fleet has also grown by 3% a year. Overall, spending on fleets averaged at just less than R70 000 a vehicle. The biggest cost drivers are the composition of the fleet and the number of kilometres that are driven. Given the relatively large number of vehicles that are older than seven years, provinces could reduce their average costs per km by accelerating the replacement of older vehicles. One area in which potential savings were identified was in the centralised provinces, where the combination of daily tariffs and per kilometre charges exceeded vehicle running costs and the cost of accumulating funds to replace them. In these provinces, surpluses have accumulated in their respective trading entities, and it might be possible to reduce tariffs charged to departments and to run down those accumulated surpluses.