The first contract to privatise frontline military operations will be awarded by the Ministry of Defence (MoD) on Saturday to replace its aging fleet of tank transporters.

The �290m deal involves leasing 92 trucks capable of transporting the 72-ton Challenger 2 tank into action anywhere in the world for a period of 20 years.

It is the first of a number of planned private finance initiatives (PFIs) that involves taking civilian personnel to the battle zone.

The use of private money to improve public services is a key government policy. But these contracts could prove even more controversial than plans to build privately owned schools and hospitals for the NHS.

The government hopes to make a 20% cost saving on the deal with the Fasttrax consortium headed by Brown and Root, a subsidiary of US oil services giant Halliburton.

The Heavy Equipment Transporter (HET) is Britain's biggest heavy haulage deal and when the transporters are not in use by the Army, the consortium will be free to lease them other customers to cover costs.

Privately operated

Oshkosh of the US will supply the trucks that will be required to operate in sub-zero Arctic conditions as well as hot deserts.

King Trailers of Leicestershire, which is better known for building transporters for outsized loads and Formula One cars, will build the trailers creating 75 jobs.

A further 80 private-sector employees, who will drive and operate the trucks, will be known as 'special reserves', wear plain army uniforms and have no legal right to refuse to go into action.

This aspect of the deal "can be used as a bogeyman" by opponents of the whole idea of contracting out armed forces tasks, said a Brown and Root spokesman.

"There are people in the services who would not want to transfer to this kind of delivery," he added.

The first transporters are expected to come into service in the second half of 2003.

Brown and Root support military operations for a number of countries in theatres around the world.