Bidders gear up for Consignia

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Bidders are lining up for the £300m-a-year contract to manage the vehicle fleet of Consignia, the new name for the Post Office.

French-owned PHH Arval has submitted an expression of interest to Consignia, while Britain's Lex Vehicle Leasing (LVL) is about to enter the bidding. Both companies have benefited recently from government contracts.

Earlier this month it was announced that state-owned Consignia would outsource its fleet, which includes the 40,000 cars and vans within Parcelforce and Royal Mail.

PHH manages fleets for several government agencies, including the Inland Revenue and Customs & Excise. Next month it hopes to make a full marketing presentation to Consignia. It is 80 per cent owned by BNP Paribas, the French bank. The rest is owned by US hire firm Avis Rent A Car.

LVL is a joint venture between HBOS and Lex Service, the publicly quoted car services firm. It owns around 90,000 vans and cars and has won several contracts this year to manage thousands of Ministry of Defence vehicles.

"We are very interested in this opportunity but it is very early days yet," said Jon Walden, the managing director of LVL.

Other bidders could include LeasePlan, the car-leasing company owned by ABN Amro. LeasePlan is itself understood to be a bid target for Volkswagen.