THE Subang Jaya Municipal Council (MPSJ) may not have any computers to work with unless they renew their computer-leasing contract as soon as possible.
For the past three years, MPSJ has been renting about 600 desktop computers from a company for its staff’s use.
The contract expires today and the council has no choice but to renew the contract. This has prompted several councillors to question why the renewal is done at the eleventh hour.
At the council’s full board meeting on Wednesday, councillor Rajiv Rishyakaran asked why the MPSJ was only renewing the contract now and not earlier (a minimum grace of six months) when there was more room for bargaining.
It was learnt that the computers were being leased for a fee of RM138 each per month.
However, MPSJ acting president Abdullah Marjunid said they had managed to reduce the fee from RM138 — which was the offered price for the lease extension — to RM79 per month per computer, when the new lease term starts tomorrow.
“We intend to continue the contract for another two years on a lease-to-own basis. This means the computers will be ours after the two-year period,” said Abdullah.
However, Rajiv still feels that RM79 is still on the high side considering that the computers are already three years old.
“Knowing well the expiry date of the contract, why didn’t the council look into the lease renewal like six months ago?
“At least there will be more room to negotiate or look into other options like purchasing from other sources as we need not necessarily have to renew.
“But it is too late now because if we don’t renew, the company has the right to take away the computers.
“Migration of system will take time, which we don’t have now,” said Rajiv.
Abdullah said the RM79 rental rate was inclusive of services like maintenance and repair works to be borne by the company in case of computer breakdowns.
Rajiv said despite being pressed for time, councillor Pooi Weng Keong, who helped in the negotiating the deal, did a good job to bring the RM138 rental down to RM79.
“This is considering the fact that we did not have a choice and the vendor knows it.”
Councillor K. Arumugam said the computers were leased in March 2008 with the contract already inked by the previous government then.
Pakatan councillors, he said, were only sworn in a few months later, in July.
“What I found a bit outrageous is that we have already paid RM5,000 for each computer in those three years but we don’t own any of them, despite the council having to fork out some RM2.98mil within the said period.
“And we have to continue renting them for the next two years before we can finally own them.
“This translates into five years altogether and this means it is more expensive than buying a brand new computer,” he said.
Arumugam added that comparisons should have been made before deciding on whether to lease, lease-to-own or to purchase.
“I would favour whichever is the cheaper alternative, and if leasing fits, then I don’t mind that.”
Pooi, when contacted, also concurred that if there had been more time (to carry out the negotiation), then the leasing price could have gone even lower.
“I only got to know a month before that the contract was expiring. We have now made it a point that all contracts must be discussed by the respective committees at least six months before the expiry date.
“Calling for tenders and so on requires time,” said Pooi, adding that the company cannot be blamed since it was a “willing-buyer, willing-seller” based on the agreement inked back then.
He said there are pros and cons when it comes to the leasing concept. The advantage, he said, is that if anything went wrong with the computers, it was not the council’s responsibility to fix it.
“Of course, the disadvantage that comes is that it is expensive. If we were to own the computers, we have to take care by ourselves but the maintenance cost is not necessarily that high,” said Pooi.
He said the council would be calling for tenders for some 250 computers to replace the existing ones which may also be expiring under a different lease date and for use of new staff.
“We need to get the quotations first before deciding on whether to lease, lease-to-own, or buy altogether.”