The Ministry of Defence has announced a £1 billion private finance initiative proposal to improve army accommodation.

Army garrisons in the Salisbury Plain area and in Aldershot have been confirmed as the locations for a PFI plan involving around £1 billion of capital expenditure and £100 million a year in operating expenditure.

The MoD said the decision followed consultation with trade unions and a detailed examination of the best way of accommodating additional army units and their associated personnel.

Work will involve the adoption and management of the existing estate and then subsequently the design, refurbishment construction, financing and integration of new facilities.

Poor standards of army accommodation are one of the ministry's more pressing concerns as it attempts to boos the number of recruits. The project will provide approximately 10,700 bed spaces and seeks to upgrade single living accommodation to the latest standards with en-suite facilities.

The new accommodation is expected to be available from mid-2005 onwards.

The ministry will now begin placing adverts seeking expressions of interest from the private sector. Contracts are likely to last for between 25 and 35 years, with an estimated contract value based on a 30-year duration.

The results of the PFI competition are expected to be announced in 2003.