KUALA LUMPUR, Aug 12 — Seven companies are set to bid for the lucrative contract to supply fleet vehicles to the government once Spanco Sdn Bhd’s existing contract expires at the end of 2019.

The new contract will run for 15 years and involve around 12,500 vehicles worth an estimated RM300 million annually starting after the fifth year.

These include official cars used by ministers and senior government officials as well as departmental fleets and police patrol vehicles.

Spanco was given an extension to manage the fleet until the end of the year following the expiry of its 25-year contract in December and confirmed that it will bid for the new job, according to The Star.

Spanco will bank on the influence of Tan Sri Robert Tan, a self-made tycoon who has been involved in a wide range of businesses including manufacturing, marketing, banking, shipping, property development and trading.

He was known as the "Casio King” and is also called the small cap king because of the substantial stakes he has built up in small listed companies such as Marco Holdings Bhd, Jasa Kita Bhd, JKG Land Bhd, FCW Holdings Bhd, Goh Ban Huat Bhd (GBH), GPA Holdings Bhd and Computer Forms (M) Bhd.

He is set to take on the formidable partnership of Naza Group and Tan Sri Vincent Tan’s Berjaya Group.

Also in contention are car rental units controlled by Sime Darby Bhd and DRB-Hicom Bhd as well as Samling Group, whose businesses include Honda and Mitsubishi dealerships, which is controlled by timber tycoon Tan Sri Yaw Teck Seng.

Comos, an electric vehicle rental company led by former Proton and Petronas executive Datuk Syed Zainal Abidin Syed Mohd Tahir, and Go Auto, the distributor of Haval vehicles in Malaysia, have also expressed interest.

"Each bidder is offering their unique capability, strength and value propositions for the government to consider,” a source familiar with the bidding process told The Star.

Under the new deal, the government would require at least 32 new Toyota Vellfire for ministers and top-ranking officers in the government. These multipurpose vehicles will be replaced every four years along with around 3,000 Honda Accord cars to be purchased for higher-ranking government officers.

The government is also planning to replace 1,300 mobile patrol vehicles over the next five years and 8,000 units of Proton Persona and Saga models for other departments’ use.

"You are looking at an investment of around RM1.5 billion over the next five years to purchase new vehicles for the government’s fleet,” the source continued.

"And then there is the cost of repairs, maintenance as well as management of the whole fleet. So the investment outlay required is huge.”