The government stopped buying cars for members of its administration and senior government officers since January 1994 and thereafter undertook a lease arrangement with Spanco Sdn Bhd (Spanco) to supply it with vehicles that were needed, the Dewan Rakyat was told Monday.

Deputy Finance Minister Datuk Kong Cho Ha said the lease agreement was 25 years and would expire on Dec 31, 2018.

He said apart from cars for official government use, Spanco also leased saloon cars for the various ministries and federal departments.

"Under the agreement, Spanco is responsible for supply, maintaining and repairing all cars leased by the government.

"In return, the government pays for the cost of rental, maintenance and repairs to Spanco on a monthly basis based on the number and type of cars leased," he said in reply to Lim Kit Siang (DAP-Ipoh Timur) who wanted to know the cost and benefits of leasing Proton Perdana V6 as official cars of the government.

Kong also said the government stopped Spanco from importing Mercedes Benz and Volvo cars in September 1997 and thereafter, all eligible officers were supplied with the Perdana V6.

He said until July, a total of 8,341 cars were leased of which 105 were for use by members of the government administration.

"The average yearly maintenance cost (not including repairs) for the Perdana V6 cars was RM2,373, which was 55 per cent less than RM3,693 for the standard yearly maintenance cost of a Mercedes," he said, adding that the government found using the Perdana V6 to be very practical as it seldom had serious technical problems.

"Until July, repairs attributing to transmission problems (Perdana V6) constituted less than 1 per cent.

"The Perdana V6 also come with a 50,000km warranty or two years whereby Proton bears to cost for spares if parts need to be changed within the warranty period," he said.

Kong said the government also conducted two studies on the concession given to Spanco and in 2004, managed to renegotiate financial terms downwards by 20 per cent.

- Bernama -