Avis Fleet Services has given government until tomorrow to pay its longstanding debt failing which the company says it would withdraw its services with immediate effect.
Although the Lesotho Times could not immediately establish exactly how much government owes the company, which supplies it with all its vehicles and also maintains the fleet, sources privy to the matter put the figure at “around M60 million”.
Avis says the debt dates back “five to six months” and despite meeting with Finance Minister ‘Mamphono Khaketla and Finance Principal Secretary (PS) ‘Mapalesa Rapapa on two occasions last month over the issue, government had not met its obligation hence the three-day ultimatum the company issued this week.
A letter written by Country Manager Keith Dell dated 4 August 2015, and addressed to Dr Khaketla, expresses Avis’ frustration over the ballooning debt, and reads in part: “Our meetings with the Hon Minister of Finance on 21 July 2015 and the PS of Finance, ‘M’e ‘Mapalesa Rapapa on 28 July 2015 refers.
“In both meetings, the seriousness of the outstanding debt owed by the Government of Lesotho to Avis Fleet, some debts going back 5-6 months, was discussed.
“It was agreed upon by both Avis Fleet and the Hon Minister of Finance that all new vehicle-replacement orders will be halted until such time as a new contract is in place.
“The concern is that this will create operational disruptions in the ministries. In addition to this, until such time as the Avis Fleet collective debt is settled by the Government of Lesotho (GOL), certain fleet-management services to the Government of Lesotho will cease until such time as the debt is settled.
“Avis Fleet is citing Clause 32.2.3 of the Avis Fleet/GOL fleet-management contract titled: Withholding of Services, in this regard”.
Mr Dell expresses “concern” over government’s indifference concerning the debt, hence the drastic decision to withdraw services until the money has been paid.
His letter continues: “It is of concern to note that since these two meetings, there has been little movement in the debt-payments. To date, we have assisted ministries that are good payers with full services but we are now going to hold the Government of Lesotho collectively responsible for the fleet debts.
“The directors of Avis Fleet Lesotho have now instructed that more stringent measures are to be implemented and until such time as the debt situation is normalised and settled, the following steps are being implemented with immediate effect:
- All government-owned (Full Maintenance) vehicles will not be serviced or attended to.
- All replacement Full Maintenance Lease (FML) vehicle orders are being withheld and not ordered.
- No new FM vehicles will be ordered by Avis Fleet.
- Avis Fleet will not agree to any FML VIP vehicle-settlements so that outgoing PSs can take possession of the vehicle.
- All short-term rentals (STR) will cease on Friday 7 August 2015 and be recalled. This includes all STR VIP vehicles that are being operated by new ministries.
- All commercial hire vehicles will be withdrawn on Friday 7 August 2015.
- All vehicles due for terming will be recalled by Avis Fleet with no replacement vehicle given in its place.”
Mr Dell further tells the minister that the directors of the company, which commenced business in Lesotho on 1 November 2007 after winning a tender to manage the government fleet, were “concerned” the ultimatum could sour relations but remained resolute in their determination to recover the money.
“It is of concern to the Directors of Avis Fleet that these steps will lead to business interruptions for the Government of Lesotho and a breakdown in relationship between Avis Fleet and the Government of Lesotho. We have to get this debt situation normalised.”
Contacted for comment yesterday, Acting Finance Principal Secretary Tom Mpeta confirmed receiving the Avis ultimatum but would not discuss the issue.
“I can’t really go into details of the matter; I think it would be appropriate if you could talk to the PS on Friday”.
Accountant General Samson Mphaka who was also copied by Mr Dell, was not reachable on his mobile phone until the time of going to press last night, while the Avis Fleet phones rang unanswered yesterday.
Avis is 75 percent owned by Avis Fleet Services South Africa, with the remaining shares belonging to a Basotho Consortium.
The company’s services include full maintenance leasing, managed maintenance, accident management, workshop management, vehicle tracking, fuel management and disposal of used vehicles through auctions.
In addition to government, the company also offers its services to the private sector.