Fleet management solution company, LeasePlan will manage and coordinate the South Australian Government fleet.

Selected from a competitive tender process, LeasePlan will provide fleet management services and Pickles Auctions will dispose of state government fleet vehicles.

The two contracts’ combined value is at $15.8 million over seven years, according to the South Australian Government.

LeasePlan will coordinate servicing and maintenance and fuel cards, as well as managing the fleet.

Finance Minister Michael O’Brien said the South Australian Government Financing Authority (SAFA) would continue to own and fund the fleet vehicles.

This will generate a lower borrowing cost to agencies in the lease rate, Mr O’Brien said.

“Both providers will use web-based management systems extensively as part of their services,” Mr O’Brien said.

As well as the projected savings of $1.7 million a year for taxpayers, Mr O’Brien said this will generate “significant” savings to government.

“To replace the existing fleet management system would require a multi-million dollar investment, which would need to be recovered from agencies through higher lease rates,” Mr O’Brien said

According to Mr O’Brien, benefits of the new model include reduced advertising costs, reduced time to sell vehicles and contract performance management.

SAFA will continue to be responsible for functions including owning and funding the vehicles through a designated borrowing facility; contract management and performance monitoring; accident management for repairs and claims; setting, updating and managing government fleet policies.

According to the SA Government, LeasePlan currently provides fleet management services to the Commonwealth and Tasmanian governments.