Re Contract

Babcock International Group PLC
02 August 2004

2 August 2004


                 Network Rail Signs Contract For Major Renewals Work



Network Rail has today announced the award of a new two-year contract for the
maintenance and operation of its High Output track renewals and ballast cleaning
plant to First Swietelsky, a joint venture between Babcock International
subsidiary, First Engineering Ltd, and the Austrian construction company,
Swietelsky GMBH.


Commencing this month, the two year framework contract is expected to be worth
approximately £30 million over two years, with an option to extend for a further
three years.


Through this innovative Operation and Maintenance contract, Network Rail have
pulled together the best of all contracting partnerships, combining the
expertise from one of the UK's most progressive renewals companies, with the
expertise from Europe's largest High Output track renewals contractor and
operator of the most sophisticated track renewals systems in the world.


The contract represents an integral part of Network Rail's drive to improve the
condition of its assets and step up its track renewals activity.


Network Rail's decision to also invest £39 million in the purchase of state of
the art, high output track relaying and high output ballast cleaning systems,
establishes their commitment to providing the most cost effective method of
renewing the country's track infrastructure.


Janette Anderson, Chief Executive of First Engineering, 'I am delighted with the
award of this contract which will deliver significant improvements in value for
our client Network Rail, including increased output, lower cost per metre,
greater system reliability and better long term planning.'


The management and development team for this national contract will be based in
York, with the equipment operating from a variety of specially constructed High
Output operation bases in the South West, for initial High Output track renewals
work on the Great Western main line.


Peter Rogers, Chief Executive of Babcock International, commented: 'Today's
announcement increases our market share in track renewals and endorses the
commitment of Babcock to develop its rail business.


'It is my aim that First Engineering continues to build its reputation in this
vitally important field and that First Engineering Track Renewals become the
leaders in the UK.'

                                    - ends-


Babcock International Group PLC

Peter Rogers, Chief Executive                                      020 7291 5000


Financial Dynamics

Rob Gurner                                                         020 7269 7221


Notes to editors: About Babcock International Group PLC


Babcock International Group PLC is a support services business providing
technical services, training and facilities management to the defence and civil
sectors.  In the year to 31 March 2004 sales from continuing business were £438
million.


The Group operates in two principal sectors: Technical Services (engineering and
support services in defence, rail, marine and secure facilities sectors) and
Training & Support (support services, training and facilities management for the
defence and civil 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