Re Contract

Balfour Beatty PLC
27 June 2002



               £120 MILLION REHABILITATION CONTRACTS AWARDED TO

                    BALFOUR BEATTY BY YORKSHIRE WATER



Balfour Beatty, the international engineering, construction and services group,
announces today that its recently-acquired utility services contractors, John
Kennedy and Kentons, have been awarded contracts to the value of up to £120
million by Yorkshire Water.

John Kennedy has won the Southern Area contract and Kenton Utilities the
North-West Area contract for the investigation, design and build activities
required to upgrade and rehabilitate Yorkshire Water's clean water distribution
network.  The contracts are for three years with an option to extend for a
further two years.

Commenting today, Balfour Beatty Chief Executive, Mike Welton, said:  'These
important new contracts highlight the excellent reputation which both Kennedy
and Kentons have with Yorkshire Water and demonstrate Balfour Beatty's strong
position  in the fast-growing utilities market.'
                    
The contracts, which commence in June, will utilise a range of rehabilitation
techniques including the innovative use of polymeric lining material on mains
ranging in size from 100 mm to 1,200 mm.

Balfour Beatty acquired John Kennedy Holdings on 10 October 2001 and Kentons on
19 March 2002.  Together, they employ some 2,400 people, have combined annual
sales of approximately £150 million and order books in excess of £500 million.

Following privatisation, gas and water utilities have developed a much greater
propensity to outsource asset maintenance, renewal and other services.  This
trend is accelerating as utilities seek to create efficiencies through the
outsourcing of an increasingly wide range of asset management and other
operational services together with maintenance and renewal.  In addition, safety
considerations are resulting in markedly increased investment in asset renewal,
particularly in the gas sector.


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