Re Contract

Balfour Beatty PLC
24 October 2006



24 October 2006

                 BALFOUR BEATTY APPOINTED AS PREFERRED PARTNER
                 ==============================================
 FOR £550 MILLION EASTERN OVERHEAD LINE AND CABLE ALLIANCE BY NATIONAL GRID PLC
 ==============================================================================


Balfour Beatty, the international engineering, construction and services group,
announces today that it has been appointed as preferred partner by National Grid
for a new five-year alliance contract, likely to be worth approximately £550
million. The contract is to upgrade and develop the electricity transmission
network in the eastern half of England. There is an option to extend the
alliance for a further five years.

Commenting today, Balfour Beatty Chief Executive Ian Tyler said:

'We are delighted to have been chosen by National Grid as their alliance partner
for this innovative contract, which utilises Balfour Beatty's design, planning,
project management, engineering and construction skills, in combination. Our
ability to deliver a competitive, integrated service is an increasingly
important factor in driving our growth and in enhancing our relationships with
blue-chip infrastructure customers.'

The alliance contract, which is part of one of the largest procurement exercises
undertaken by National Grid, will support their increased investment in the
electricity transmission network and contribute to long-term security of supply.
The works are required to connect new infrastructure such as wind farms and new
generation plant to the Grid. They will also cover the enhancement and
replacement of existing assets.

The contract, which will come into force in April 2007, is one of two overhead
line and four sub-station alliances announced by National Grid today.

Balfour Beatty is the leading UK supplier of power transmission and distribution
networks to the international power supply industry. It is also a partner to
National Grid in its 30-year gas mains network replacement and abandonment
programme under an eight year alliance contract for the North West of England,
worth approaching £400 million.

                                      ENDS


Enquiries to:-

Tim Sharp
Tel: [phone]
www.balfour.beatty.com


Notes to Editors

 1. The contract will be delivered using the skills and resources of Balfour
    Beatty, the leading specialist in the design and construction of power
    transmissions and distribution networks and Balfour Beatty Management, the
    group's professional and technical services company; which specialises in
    programme and project management and technical management consulting.

 2. 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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