Fleet management company takes Telkom to court

(Duncan Alfreds, Fin24)
(Duncan Alfreds, Fin24)

Johannesburg - A fleet management business has launched court action against Telkom after losing a contract to supply the telecom company's national team of field technicians with vehicles.

Daimler Fleet Management (DFM) - a subsidiary of Mercedes Benz Financial Services that trades as Debis Fleet Management - won a contract in 2000 to manage Telkom’s fleet of 6 000 vehicles in South Africa.

The managing executive for group communication at Telkom, Jacqui O’Sullivan, told Fin24 that the contract was renewed in 2008 and extended twice in 2012 and 2013.

Telkom then placed its fleet management business out on tender in mid-2014 and Bidvest were awarded the contract.

However, technology publication TechCentral reported on Wednesday morning that Debis Fleet Management has launched court action against Telkom over a dispute regarding its fleet management contract.

Responding to questions from Fin24, DFM's manager for group external affairs and communications, Jeanette Clark, said her company's existing agreement with Telkom expired on March 31 2015 and that a court date has been set for next week.

“DFM has not been able to obtain clarity regarding certain important topics relating to the expiry of the agreement and in the interest of the business, DFM has applied to the North Gauteng High Court on an urgent basis for recourse in this matter,” said a DFM spokesperson in an email to Fin24.

“The matter was heard on the 9th of April and judgment was reserved. Judgment is expected to be handed down latest 24 April.

“Until the judgment is handed down DFM continues to provide the fleet management services to Telkom. We cannot comment further on this pending legal matter,” said the spokesperson.

Meanwhile, Telkom’s spokesperson Jacqui O’Sullivan said in a response to Fin24’s questions that the telecom company’s existing contract with DFM made provision for a three month “lead out” phase after the expiry of the contract.

O’Sullivan added that during this “lead out” period, DFM are required to assist Telkom in managing a transition to Bidvest.
“In March this year, Debis informed Telkom that their interpretation of the contact was that the vehicles used by Telkom’s national team of technicians, were not included in this ‘lead out’ phase,” O’Sullivan said.

“As the contract in question relates to vehicle fleet management, Telkom contends that the notion that the actual vehicles would not be included in the ‘lead out’ period, is simply illogical,” added O’Sullivan.
The High Court judge ordered that DFM continue to provide the fleet management service to Telkom, said O’Sullivan.

“It is disappointing that after such a long partnership, as well as a fair and competitive tender process, Debis has chosen to follow this route. Telkom is confident in its case and that we will receive a favourable outcome next week,” said O’Sullivan.

Brent Crude
All Share
Top 40
Financial 15
Industrial 25
Resource 10
All JSE data delayed by at least 15 minutes morningstar logo
Company Snapshot
Voting Booth
Please select an option Oops! Something went wrong, please try again later.
I'm not really directly affected
18% - 1527 votes
I am taking a hit, but should be able to recover in the next year
23% - 1995 votes
My finances have been devastated
34% - 2980 votes
It's still too early to know what the full effect will be
25% - 2163 votes