Cowie in talks with MoD over tank leasing

British troops could roll into battle in tanks owned by the parent of the Grey Green bus group if talks between Cowie, the Newcastle-based motor group, and the Ministry of Defence bear fruit, writes Tom Stevenson. The company admitted yesterday that privatised front-line vehicles was a "controversial area" but said it was keen to tie up a deal in which it could own Challenger tanks and lease them to the Army.

Robert Blower, a spokesman for Cowie, which up till now has restricted its leasing activities to company car fleets, said: "The Ministry is very open minded under the Private Finance Initiative and is looking at the possibility of the private sector coming in and buying front-line vehicles. We have demonstrated there are significant savings that can be made."

A Ministry of Defence spokesman confirmed there were no "no-go areas" under the Private Finance Initiative and said "any idea will be pursued if it is judged to be the best way forward".

Mr Blower signalled Cowie's ambitions as the company announced a multi- million pound deal with the MoD to lease 1,400 pieces of material handling equipment at 29 Army, Navy and Air Force locations in the UK. The contract covers a wide range of equipment from fork-lift trucks to large conveyor belt systems costing up to pounds 250,000 each. "People were surprised we could do a deal with the materials-handling equipment," Mr Blower said. "But we're a financial company. We can manage any piece of equipment and save the taxpayer money."

He admitted that talks were only preliminary and said it might take several years to agree the terms of any deal, which might involve Cowie obtaining an international arms dealing licence so it could dispose of equipment at the end of the agreed term.