Re Contract

Balfour Beatty PLC
23 September 2004

23 September 2004



           BALFOUR BEATTY APPOINTED PREFERRED BIDDER FOR £123 MILLION
                        BASSETLAW GROUPED SCHOOLS PROJECT

                Fourth Schools PFI Project for Transform Schools
                ------------------------------------------------

Balfour Beatty, the international engineering, construction and services group,
announces today that its education PFI concession company, Transform Schools,
has been appointed preferred bidder for the 25-year, £123 million Bassetlaw
Grouped Schools PFI concession by Nottinghamshire County Council.

The project, which is anticipated to reach financial close in January 2005, will
involve five new secondary schools, a new special school and two new leisure
centres in Retford, Worksop and Tuxford. It will also create two new centres for
post-16 education. Phased completion of the new facilities is scheduled for 2006
and 2007. Balfour Beatty will invest some £8 million of equity in the project.

Commenting on the award, Balfour Beatty Chief Executive, Mike Welton, said: 'We
are delighted to have been chosen to provide Bassetlaw with new facilities and
support Nottinghamshire County Council's objective of giving pupils and teachers
an enhanced environment where learning can flourish. Our objective is to bring
the same level of professionalism and services to this task as has been recently
recognised in the work we are doing in Stoke and Rotherham.'

The key objectives for Nottinghamshire County Council are the replacement of
deteriorating and unsuitable accommodation, the improvement of educational
attainment and post-16 staying-on rates and improved community facilities.

Construction work will be carried out by a joint venture of Balfour Beatty
subsidiaries, Balfour Beatty Construction and Balfour Kilpatrick. Facilities
management, to a value in excess of £100 million, will be undertaken by Haden
Building Management, another Balfour Beatty subsidiary. This will include
maintenance, catering, cleaning and grounds maintenance.

This is Balfour Beatty's fourth major schools PFI project through Transform
Schools, in partnership with its joint investor, Innisfree Ltd. Its projects at
Stoke and Rotherham are proceeding very successfully, while financial close on
the project for North Lanarkshire County Council, for which Transform Schools is
preferred bidder, is expected during this year.

In May 2004, Transform Schools won both Best Operational Education Project and
the overall top prize of Best Operational Partnership (All Sectors) at the 2004
Public Private Finance Awards. The company won for its 25-year Stoke Schools
concession, under which nine new schools were contracted to be built, 98
refurbished and full responsibility taken for maintenance and whole-life care of
the whole stock of 122 schools.

In partnership with the local authority and demonstrating the flexibility of
Transform Schools' approach, the scheme has been subsequently varied to include
13 new schools and numerous new extensions. In their summary, the judges for the
awards said that they 'were highly impressed by the success of this multi-school
project, covering the entirety of Stoke's school estate, and the delivery of
continuous improvement to school services'.

                                      ENDS

Enquiries to:

Tim Sharp
Tel: [phone]
www.balfourbeatty.com


High resolution photographs are available to the media free of charge at
www.newscast.co.uk ([phone]).


Notes to Editors
----------------

1.    In addition to Stoke, Balfour Beatty's other schools PFI projects are:

      -  for the Metropolitan Borough of Rotherham (10 new schools and five
         refurbished schools plus energy management, repairs and maintenance, 
         caretaking, cleaning and catering - in a 30-year concession worth 
         £100 million in construction and £40 million in long-term services)

      -  for North Lanarkshire Council (24 new schools in a 30-year concession
         worth £140 million in construction and up to £100 million in long-term
         services - preferred bidder).

2.    Balfour Beatty was recently awarded all design and construction work for
      schools in East Lothian in a contract worth some £40 million under the PPP
      concession for that council.

3.    Balfour Beatty is providing all design and build services for Babcock and
      Brown in its schools PFI projects. Work secured under this arrangement to
      date exceeds £80 million, including the construction of five new schools 
      in Calderdale, West Yorkshire.

4.    Balfour Beatty is a world-class engineering, construction and services
      group, well positioned in infrastructure markets which offer significant 
      growth potential. Its partnerships with public and private customers 
      generate secure, long-term income. Its financial position, with 
      significant net cash and with strong operating cash flows, offers 
      continuing flexibility to add additional capacity and expertise to the 
      business mix and to make appropriate investments in PPP/PFI and other 
      long-term growth opportunities.




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