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Monday, 22 October, 2001, 16:28 GMT 17:28 UK
BT eyes Post Office vans
Post Office van and delivery man
The contract to manage Post Office vans is up for grabs
British Telecom has emerged as a surprise contender for the contract to run the Post Office's 40,000 strong fleet of delivery vans.

The telecom giant wants to merge the Post Office fleet with its own vehicle pool, BT Fleet Partners, and spin the new entity off as a separate company, industry sources say.

A BT spokesman confirmed it had expressed an interest in taking over the Post Office van fleet, "along with other companies".

BT said in April it planned to sell up to 58,000 of its own vehicles to a fleet-leasing business, as part of a plan to reduce its 30bn debt mountain.

The company recently signed a 500m 10-year deal to manage more than 8,000 vehicles for the UK Ministry of Defence.

BT claims its vehicle fleet, which is one of the biggest in Europe, is worth 500m.

Financial crisis

Consignia, which operates the UK's state-owned postal service, said in September it was looking for a company to manage its vehicle fleet.

The postal giant is desperate to cut costs in the face of a growing financial crisis.

It has already warned of scrapped projects and a widespread operations revamp aimed at saving 1bn.

Job cuts have yet to announced, but press reports say as many as one in 10 posts in some units may eventually go.

Consignia's vehicle services operation employs around 1,700 people working mainly on vehicle leasing, fleet management and maintenance.

The deadline for companies to register an interest in taking it over was 10 October.

Meanwhile, in a separate development, BT is reportedly in talks with BSkyB to form a strategic alliance that could involve joint billing for pay television and telecommunications services.

BT shares closed 7.75p down at 342.25p on Monday.

See also:

18 Oct 01 | Business
Watchdog caps BT charges
16 Oct 01 | Business
BT axes AT&T joint venture
16 Oct 01 | Business
Analysis: BT's lonely future
03 Oct 01 | Business
Consignia cuts 1bn to stem 'crisis'
27 Jul 01 | Business
Post Office threat to bank jobs
13 Jul 01 | Business
Consignia to axe 2,100 jobs
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