The stoppage of the h721million car leasing deal between Laikipia County government and Toyota Kenya Limited by governor Joshua Irungu has blew off the lid on how national and county governments are committing taxpayers’ money to outrageous car leasing contracts without getting value for money.
Similarly, emergency medical service providers like Red Cross Kenya have been found to have engaged in similar ambulance leasing deals with public entities at exorbitant charges and in some instances and at times through flawed procurement processes.
After assuming office, Irungu ordered cancellation of the contract, the county had paid over Sh500 million to lease the 21 vehicles.
Effectively, following the termination, the county does not own any of the vehicles after blowing Sh0.5billion on the project.
“Laikipia County Government team has held several meetings with the Toyota Kenya Limited team chaired by His Excellency the Deputy Governor Reuben Kamuri on September 12, 2022 and September 24, 2022. In the meeting both parties were given an opportunity to raise issues and respond. Sadly, and unexpectedly, Toyota Kenya Limited declined to grant or cooperate on all the reasonable requests made to them by the County Government of Laikipia.” A past statement by the county reads in part.
According to the breakdown of the cost injected for leasing and not buying of the 20 double cabin trucks and a Toyota Prado from Toyota Kenya, simple computation shows each Toyota Hilux double-cabin vehicles would have cost Sh32million at the end of the five-year period.
Currently, a zero-mileage Hilux double cabin goes for Sh4.9 million, meaning each vehicle leased would have bought the county six Hilux units.
“It does not make sense to lease a vehicle for five years and pay five times its market value in leasing fee and then have the owner take it away. We are not totally opposed to leasing of vehicles but the terms have to be reasonable.” Irungu said.
Acting Finance Chief Officer Daniel Ngumi said the county was not totally opposed to leasing agreements, either for vehicles or medical equipment but it has to be structured in a way that it gives value for money.
“The need assessment for these vehicles was not considered. Why do we need 20 or 40 vehicles including an executive vehicle which will be parked at the governor’s office most of the time?” Ngumi posed.
Kenya Red Cross had in 2014 been contracted by several counties over the leasing at Sh600,000 per equipped ambulance.
In Garissa, the deal got Governor Nathif Jama in trouble as he was charged alongside eight other county officials with breaching procurement laws.
Ethics and Anti-Corruption Commission officials had found that there were cheaper medical service providers that were not contracted, for instance, St John’s Ambulance Kenya, which was offering the same service at half the Red Cross cost.
The Red Cross has for years defended its leasing deals, which targeted counties, saying they were cost-effective.
Currently, a consortium of RentCo Africa, DT Dobie and Stanbic Bank is leasing Volkswagen sports utility vehicles (SUVs) to the Directorate of Criminal Investigations (DCI).
They have a contract to deliver 111 SUVs to the National Police Service (NPS at a cost of Sh510 million.
Between 2015 and 2019, the police leased 230 Ford Ranger pick-ups at Sh2.4 billion from CMC Group, each for Sh10.4 million.
In 2016, the government leased 40 station wagons and five ambulances from Urysia at Sh631 million over four years. At the time, the station wagons were selling for Sh5 million. This meant that Kenyans paid over Sh10 million to lease each vehicle from Urysia.
