Re Contract

Balfour Beatty PLC
07 June 2006


7 June 2006

      BALFOUR BEATTY APPOINTED PREFERRED BIDDER FOR NORTHERN GAS NETWORKS
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          UTILITIES CONTRACT WITH A POTENTIAL VALUE OF OVER £700 MILLION
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Balfour Beatty, the international engineering construction and services group
announces today that its specialist subsidiary, Balfour Beatty Utilities, has
been appointed preferred bidder for the gas mains replacement contract for
Northern England by Northern Gas Networks.

The total value of the seven-year contract, with consortium partner Morgan Est,
will be approximately £420 million. A potential five-year extension option is
likely to be worth a further £300 million. Northern Gas Networks, which bought
the region's 36,000 km gas mains network from National Grid in 2005, employs
United Utilities to operate the system.

Commenting on the award today, Balfour Beatty Chief Executive Ian Tyler said:
'We are delighted to have been awarded preferred bidder status for this
contract. The award will give Balfour Beatty a leading position in gas to add to
its existing leadership in the clean water and electricity sectors.'

Jamie Major, United Utilities' Head of Commercial said:
'This is real progress for United Utilities and the gas industry in the North of
England. The selected partners are major, well-respected companies with
experience of this type of work and of this form of contract agreement. They
have all worked successfully on contracts with United Utilities before and have
an excellent track record.'

The contract will commence on 1st July 2006. The scope of work involves mains
replacement, including diversions, reinforcements and connections in Northern
England. The contract area covers 6.5 million people in the area between Berwick
in the North East, Carlisle in the North West and Yorkshire. The programme will
involve replacing more than 500km of pipes each year.

The award follows the recent news that Balfour Beatty had won the £115 million
contract to build the Northern Ticket Hall, a key component of the Kings Cross
redevelopment and regeneration programme. In addition to this contract,
programme and project management for the whole scheme is being carried out by
Balfour Beatty Management, the professional and technical services arm of the
group.

Balfour Beatty Management's leadership has been a significant factor in the
successful delivery of the new London Underground Western Ticket Hall and other
new underground station operating facilities at King's Cross St Pancras for
London Underground. The opening of these new facilities, which form part of the
whole scheme, was marked by a formal ceremony with the Mayor of London and the
Secretary of State for Transport on 25th May. The whole scheme is scheduled to
be complete in 2010.

                                      ENDS

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



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