According to the latest report by
the Auditor General, penalties worth about RM54.51 million were not imposed on
the concessionaire, even though 6,028 vehicles were delivered late — some by up
to 508 days. This happened despite the contract clearly allowing penalties for
such delays.
The Auditor General’s Report did
not name the concessionaire, but the Ministry of Finance (MOF) in a
parliamentary reply in 2025 stated that Spanco Sdn Bhd currently manages the
government’s vehicle fleet.
Source: https://www.wikiwand.com
Spanco signed a new 15-year
concession with the MOF on Jan 31, 2022 to manage government vehicles. It
began on July 31, 2022, and runs until July 30, 2037. This replaces the earlier
agreement, which expired in 2018 but was extended four times until July 2022.
Under the agreement between the concessionaire and the MOF, Clause 11.2
stipulates that vehicles must be delivered within 60 working days from the
order date, with penalties to be imposed for delays caused by the company.
Clause 11.4 also requires the concessionaire to inform the government within 30
working days if it cannot meet the delivery schedule, allowing both parties to
discuss appropriate action.
However, an audit analysis of the
concessionaire’s vehicle management system showed that as of Dec 31, 2024, none
of the delayed deliveries had been subject to penalty claims. The auditor
general also found that the government overspent RM28.79 million by continuing
to use 5,323 leased vehicles after their contracts expired, instead of
replacing them as scheduled. From 2021 to 2024, RM123.43 million was spent,
though only RM94.64 million would have been needed with timely replacements.
The report said that based on responses from the MOF, a penalty committee and penalty assessment working committee had been formed to review and determine appropriate claims to be submitted by the ministries involved. The auditor general recommended that the ministry, as the contract administrator, take action to recover the estimated RM54.51 million in penalties and expedite the resolution of issues related to replacing vehicles with expired leases.
The auditor general has urged the government to closely monitor new borrowings used to repay maturing loans, as debts worth RM490 billion are due within the next five years. National debt servicing expenditure rose 9% to RM50.48 billion in 2024 from RM46.33 billion in 2023, mainly due to higher interest payments on the government’s outstanding debt of RM1.25 trillion as at Dec 31, 2024, according to the Auditor-General’s Report 3/2025. Despite this, the report noted that the federal debt growth rate eased to 6.4% in 2024 from 11.4% in 2021, while principal repayments for maturing loans declined 12.7% to RM122.34 billion, reflecting fewer loans reaching maturity.
The AG’s Report requires follow-up and unless the PAC or such similar body acts seriously, we tend to keep repeating the same stories. The other is there are no (or very little) penalties on persons responsible for these mistakes. Why? In most cases, it is decided by committees and not by any single individual. So, we go on to the next report by the AG.
References:
AG's report flags poor management of govt vehicle fleet, failure to enforce RM54.5m penalties, Choy Nyen Yiau, theedgemalaysia.com, 6 October 2025
Auditor general urges govt to
monitor borrowings as RM490b debt due in five years, Choy Nyen Yiau, theedgemalaysia.com, 7 October 2025
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