Hundreds of new jobs were due to be confirmed on Friday as a new £160 million Ministry of Defence contract was announced for a Welsh truck plant.

Six months of speculation were expected to end when defence procurement minister Lord Bach visited the Oshkosh factory in Llantrisant.

The Western Mail newspaper revealed last June that the plant close to The Royal Mint would build the next generation of wheeled tankers for The British Army, Royal Air Force and Royal Navy.

Initially the contract will create about 200 new jobs at the plant which currently employs around 130 assembling refuse trucks.

But the supply and maintenance contract for front line fuel and water tankers will gradually increase jobs over 10 years starting in 2004.

The MoD has also insisted Oshkosh ensures supplies of components for the service life of the vehicles, taking the overall contract up to 2034.

Ever since the Western Mail disclosed Oshkosh of Wisconsin was interested in the MoD contract, there have been complex negotiations behind the scenes.

Welsh Assembly government economic development minister Andrew Davies visited the US to meet Oshkosh executives and offer all possible support to their investment.

Company representatives have been to Wales to look at the site and were encouraged by their reception.

The massive contract means a new assembly facility will have to be created and further specialist contracts are likely to be brought into the factory, so there will be spin-off benefits for suppliers.

Jobs will also be created at the Army Based Repair Organisation in Warminster.

Oshkosh has previously won contracts to supply the British Army with tank transporters and it hopes to win subsequent contracts, possibly for additional work at Llantrisant.

Oshkosh Truck Corporation considers its Geesink Norba plant in Llantrisant an ideal base for further expansion in commercial and military product sales throughout Europe.

One of the major factors in that level of investment is the company’s defence business growth.

Under the new contract with the MoD it will supply approximately 8,500 support vehicles for the British Army over 10 years.

The company has confirmed it would undertake much of the chassis manufacturing at the Geesink Norba plant and then assemble parts brought in from other specialist suppliers.

Oshkosh Truck Corporation makes all the heavy-payload trucks used by the US Army, which have been the backbone of its military operations in the Gulf, Bosnia and Afghanistan and designs and manufactures a range of special vehicles and vehicle bodies for emergency, refuse and construction markets.

Industry experts said the additional 200 jobs could be just the start. If major contracts were secured from the MoD or other European forces it would rise to more than 800 new jobs to support manufacturing for Europe.

Prof Garel Rhys, director of the Centre for Automotive Industry Research at the Cardiff University Business School, said last summer, “This is excellent news for Wales. For years we have been unsuccessful in securing a car manufacturer although we have won major components such as engines, and we have not appreciated the opportunities presented by the heavy vehicle industry.”

Lord Bach, who was expected on Friday announce the contract for Wales, said on Thursday night, “This is very good news for Wales and I hope it will be very welcome.”