NIP rents vehicles for N$10m instead of buying them for N$8m – Top Story 1

… chief internal auditor’s advice ignored

The management of the Namibia Institute of Pathology (NIP) has gone against the advice of its chief internal auditor to buy 18 vehicles for N$8 million, instead of renting them at N$10,4 million over four years.

A breakdown of the new fleet costs prepared by NIP chief internal auditor Mekondjo Katunga in August 2023, which The Namibian has seen, shows that by the end of the lease period, the NIP would have spent N$10,4 million on vehicles which would not become assets of the parastatal.

Katunga advised against the leasing of the vehicles.

“At the end of the given year lease period, the vehicles will not belong to the NIP. The leasing option will create four permanent liabilities or expenditures.

“The insurance costs are to be covered by the NIP. Fuel costs are to be covered by the NIP. The vehicle will be driven by the NIP. The cost for leasing is be advisable,” Katunga said.

The cost comparison was sent to the company’s management and its board.

It further shows that the vehicle dealership would only replace tyres and batteries.

The decision to acquire new cars has irked some staff members.

The leasing of vehicles will create a liability for NIP for four years.

Two weeks ago, the parastatal released a statement, saying the new rented vehicles would improve transportation and ensure timely and high-quality healthcare support.

In that statement, the NIP’s chief executive, Kapena Tjombonde, said the transportation process would reduce transit times.

“With these new vehicles, we aim to streamline our specimen transportation process, reduce transit times and uphold the integrity of all specimens during transit.

“Therefore, the NIP recognises the critical importance of efficient and reliable specimen transportation in ensuring the timely and accurate delivery of healthcare services,” she said.

Tjombonde said the delivery of new vehicles represents a proactive step in the NIP’s commitment to overcome operational challenges and deliver on its promise of excellence in healthcare support.

“We are confident that these new vehicles will not only address the challenges we have faced in specimen transportation, but also significantly improve the efficiency and reliability of our services,” she said.

Meanwhile, the vehicles are registered in Zeda’s and not in the parastatal’s name.

COSTS BREAKDOWN

In August last year, the NIP advertised a tender to buy vehicles on full maintenance lease basis and fleet management services for 48 months.

Three companies – GG Indongo Famili Car Hire and Project Logistics (with N$10,6 million), Performance Development Centre (with N$9,8 million) and Zeda Namibia Pty Ltd trading as Avid Fleet (with N$11 million) – tendered their bids.

Katunga’s comparison of costs shows that the company would lease eight Nissan NP 200s, seven Toyota double cabs 2.4, one Toyota Hilux, one VW polo and one Toyota Quest sedan.

One Nissan NP 200 costs N$296 800.

To buy eight of these vehicles, the NIP would spend N$2,3 million.

To lease them over four years, the NIP would spend N$3,4 million.
One Toyota double cab costs N$677 954.

To buy seven of these vehicles, the NIP would spend N$4,7 million.

To lease them for four years, the NIP would spend N$5,5 million.
One Toyota Hilux costs N$382 000.

To lease one for four years would cost the NIP N$490 000.

One VW Polo costs N$236 700.

To rent one for four years would see the institute spend N$508 000.
A Toyota Quest costs N$236 700.

To lease one for four years, the NIP would suspend N$472 000.

DEFENCE

Two weeks ago, Tjombonde defended the option to rent the 18 vehicles rather than buying them.

“It is our considered opinion that you have not considered the various aspects of the lease agreement, which includes the lease of seven high-value GD6 Hilux double-cab bakkies as part of the 18 vehicles, 48 months’ worth of maintenance and repairs, the replacement vehicles in downtime periods, fleet management, which includes state-of-the-art tracking and vehicle management systems,” she said.

She said the full maintenance option, among others, attracted the NIP.

“The full maintenance lease is very attractive, such as in the event that a particular vehicle breaks down, the service provider will collect the broken-down vehicle and offer another vehicle immediately, while attending to the maintenance of the vehicle in question,” Tjombonde explained.

“NIP is in the business of providing critical healthcare, premised on our corporate purpose which places a focus on the saving of lives. We are not in the business of maintaining vehicles and therefore we are intentional to remain focused on our core mission.”