THE Royal Mail has agreed a new supply deal with Vauxhall, in a van contract worth £190 million at showroom prices over the next five years.

The deal means that Vauxhall will supply up to 20,000 Combo vans to the postal service. It won the contract after the tendering process took place at an online auction involving five manufacturers and a number of contract hire companies.

All 20,000 vans will be powered by the 1.7-litre 16v diesel engine, and will take over the job of carrying post from the present fleet of Ford Escort vans and Peugeot Partners.

The Royal Mail is as yet undecided on the mix of vehicles. As well as the standard specification Combo, the service will take five door versions - the Tour - and Combos with sliding side doors.

Tony Shaw, purchasing manager at the Royal Mail's vehicle services unit, said: 'Vauxhall offered the best value for money across all the factors we took into consideration.

'We looked at a number of vehicle manufacturers and three funding options, outright purchase, contract hire with maintenance and contract hire without maintenance, before opting for outright purchase as our preferred option.

'Wholelife costs were an important consideration for us, as was Vauxhall's commitment to the environment, and we will be evaluating alternative fuels including liquefied petroleum gas, for the future.'

Vauxhall last supplied vans to the Royal Mail five years ago, and fleet sales director Maurice Howkins is happy the firm is back on the delivery round.

'We used to supply Royal Mail with their postal delivery vehicles, and so are delighted to be renewing our business relationship with them. The decision to opt for Vauxhall Motors came only after a detailed evaluation and one of the key factors once again was Vauxhall's class-leading wholelife costs, which undoubtedly helped swing the decision in our favour.'

The vans will be phased in over the replacement cycle, with the first models already in service.