MoD leasing deals worth Elbn a year
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by Amanda Bradbury • The truck rental sector is to gain work worth £1bn a year when 100,000 Ministry of Defence vehicle leases come up for grabs in a package including maintenance and repair.
A move to full contract hire, rather than finance leasing, of non-armoured, administrative "B" vehicles is likely to result in hundreds of redundancies of MoDemployed staff. Many of the base and mobile workshops operated by the civilian Army Base Repair Organisation and Royal Electrical and Mechanical Engineers face closure: a multi-million-pound market testing programme of MoD workshops could be shelved.
The first large-scale market test of workshops—in the £10m-a-year eastern region—was delayed within hours of confirmation last week that "leasing" MoD vehicles is being considered.
Defence Secretary Malcolm Rifkind said last week that he was looking at leasing as part of the defence review Front Line First: the MoD says 28,500 "off-the-peg" administrative vehicles are likely to be the first to be leased.
But 66,000 specially built or adapted vehicles are also expected to be offered to the industry under finance lease terms or full contract hire.
Serco and TNT would welcome a straight finance leasing deal: both companies have invested heavily in bidding for market tested workshops.