Vickers spies tanks deal

Vickers is close to clinching a £250m export order for 40 Challenger 2 tanks from Qatar, according to a source close to the company. A City analyst supported this view, and said Vickers should seal the deal soon. The Ministry of Defence confirmed this week that Challenger 2 has completed reliability trials and met agreed […]

Vickers is close to clinching a £250m export order for 40 Challenger 2 tanks from Qatar, according to a source close to the company.

A City analyst supported this view, and said Vickers should seal the deal soon.

The Ministry of Defence confirmed this week that Challenger 2 has completed reliability trials and met agreed technical milestones imposed after problems with British army production tanks.

Last November Britain signed a £500m memorandum of understanding with Qatar to sell British Aerospace Hawk jets plus 90 GKN Piranha armoured vehicles, 15 Shorts Starburst air defence missile systems and two Vosper Thornycroft patrol boats.

But in February there were suggestions that Qatar might cut the deal back to just the Piranhas, and former defence procurement minister James Arbuthnot said the UK might offer Qatar a revolving credit deal. The analyst agrees the Piranhas are still top of the shopping list.

Vosper Thornycroft said this week it expects to receive the Qatari £100m patrol boat contract in the middle of next year.

Vickers may be able to offer Qatar a cheap deal by adding the tanks to the same production run as Oman’s current orders for 38 Challenger 2s.

* Vickers – which has put its Rolls-Royce car business up for sale – said that it expects to send an information memo on Rolls-Royce Motors to interested parties `who are considered to be credible’ within the next three weeks. Vickers wants to sell Rolls-Royce by next spring. Last week vehicle component group Mayflower abandoned its proposed bid for Vickers.