Government finds purchase cheaper than leasing

The government is once again purchasing its vehicles after having found that leasing was working out to be more expensive.

The director-general for operations at the Finance Ministry, Salvu Gauci, told a meeting of the Public Accounts Committee that leasing had been the preferred option for some time, since newly appointed ministers had not wished to inherit their predecessors' cars and replacement vehicles were needed practically every five years.

Replying to questions by committee chairman Charles Mangion and Labour MP Carmelo Abela, he said that leasing the new vehicles had worked out to be more expensive than purchase.

Lisa Schembri, director, financial management, said the Finance Ministry embarked on a pilot project 18 months ago through which all expenses by the ministry's car fleet were recorded. All other ministries and departments would soon be carrying out the same exercise so that there could be easier comparisons and control.

Ray Farrugia, director-general of works, said new vehicles were being bought instead of leased since leasing costs were equivalent to the purchase cost within some three years.

He said that following a number of measures to control abuse, fuel purchased from the Kirkop Fuel Station for the vehicles of the Ministry of Resources and Infrastructure had dropped from 900,000 litres in 2003 to 800,000 litres in 2004.

Mr Farrugia said the Ministry of Resources and Infrastructure was also making savings by better utilisation of its workers.

Paving works, for example, were being done by the ministry's personnel instead of being outsourced, as had been the case before.

The ministry's workers were also building the refugee complex at Safi.

Earlier, the committee also discussed the stipends system.

Grant Maintenance Board chairman Mario Schiavone said there were 250 shops which accepted students' smart cards. The shops sold educational material or services.

The board had total control on the system and contractors had to follow directives issued by the board.

The board regularly checked who was buying what, from where and the amounts spent. Inspectors were sent regularly to the shops and those caught abusing were either removed from the system permanently or for a limited period or received a warning, depending on the extent of the abuse.

One of the shops removed from the system had sold three mobile phones on smart cards in one day.

Mr Schiavone said that in 2004, 58 per cent of the smart card money was spent on books, 22 per cent on computers and computer programmes and six per cent on internet. The statistics also showed that abuse amounted to less than one per cent.