Contract Extension

Babcock International Group PLC
02 June 2005


2 June 2005

                        Babcock International Group PLC


            EXTENSION OF PARTNERING AGREEMENT AT HM NAVAL BASE CLYDE


Babcock International Group PLC, the support services company, is pleased to
announce that the Ministry of Defence has awarded Babcock Naval Services (BNS) a
5 1/2 year extension to the partnering agreement at HM Naval Base Clyde. The
contract extension is valued at circa £400 million and will extend the
relationship between BNS and the MoD at HM Naval Base Clyde until 2013.  The
extension raises the total value of Babcock's order book to £1.6 billion.


The original partnering agreement came into effect in September 2002 and saw BNS
take over responsibility for the provision of engineering support, facilities
management and other specialist support services to the MoD and Royal Navy
covering an initial five-year period through to August 2007.  During the first 2
1/2 years of this contract BNS has successfully reduced costs and improved
service levels and it is this success that has resulted in the MoD opting to
award an extension to the contract a year earlier than planned. The award of
this extension to the contract brings the total value of the partnering
agreement to circa £825 million.


Peter Rogers, Chief Executive of Babcock International Group PLC said:


'This early extension is testimony to the performance of the Babcock team and
the strength of the partnering relationship with the MoD.'


Naval Base Commander at HM Naval Base Clyde, Commodore Carolyn Stait, RN, added:


'We are now fully committed to our future relationship with Babcock Naval
Services who have shown in the last 2 years just how efficient and cost
effective a MOD/Commercial partnership can be. This produces real results for
operational effectiveness and value for money for the taxpayer. I am genuinely
excited about what this contract extension means for the Base and for our
ability to support the fleet'.


For further details please contact:


Babcock International Group PLC
Peter Rogers, Chief Executive                                      020 7291 5000

Financial Dynamics
Rob Gurner                                                         020 7269 7221



Notes to Editors


Key facts about the partnering contract:


•  The original Clyde Industrial Partnering contract was signed on 30th
   May 2002 and successfully came into effect on 1st September 2002

•  In its first two years of operation, the partnership delivered
   significant savings, resulting in BNS securing the Bank of Scotland/Insider
   magazine Scottish PFI/PPP of the Year in 2003

•  1,700 civilian posts were moved to BNS under the Transfer of
   Undertaking (Protection of Employment) (TUPE) regulations

•  300  Royal Navy personnel work within BNS

•  Some 50 MOD civilian and service personnel are embedded within the BNS
   management structure to satisfy the requirements of the site nuclear 
   Authorisee, an arrangement agreed with the independent nuclear regulator


About Babcock International Group PLC:


Babcock International Group PLC is a support services business providing a range
of technical, training and facilities management services to the defence and
civil sectors.  In the year to 31 March 2004 sales from continuing business were
£438 million.  In June 2004 Babcock acquired the Peterhouse Group, which had
continuing sales (excluding rail maintenance) of approximately £26O million.


The Group operates across six business segments:


Defence Services, supplying facilities management, equipment support and
training services to the armed forces.


Technical Services, providing engineering and logistical support to both the
defence and civil sectors in the UK.


Engineering and Plant Services supplying design, installation and maintenance
support to the energy sector in Africa and the US.  It also holds the Volvo
franchise for construction equipment in Southern Africa.


Rail, providing design, renewal and installation services for the UK rail
infrastructure.


Networks, supporting the design, maintenance and renewal of power transmission
and cellular telecommunications networks in the UK.


Health, Safety and Environmental services, providing surveying and monitoring
services to utility companies and safety equipment and training to a range of
sectors.


Babcock's head office is in London and the Company's shares are quoted on the
London Stock Exchange.  For further information, please visit Babcock's website
at www.babcock.co.uk.


                      This information is provided by RNS
            The company news service from the London Stock Exchange