Re Contract

Balfour Beatty PLC
23 November 2004


23 November 2004



                  BALFOUR BEATTY APPOINTED PREFERRED BIDDER FOR
                   £56 MILLION BIRMINGHAM SCHOOLS PFI PROJECT
                   ==========================================

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 £56 million Birmingham Schools PFI
concession by Birmingham City Council.

The project, which is anticipated to reach financial close in May 2005, will
provide a total of 12 new and refurbished schools, including two secondary
schools, nine primary schools and one early years centre within the City of
Birmingham. Balfour Beatty will invest some £3.5 million of equity in the
project.

Commenting today, Balfour Beatty Chief Executive, Mike Welton, said: 'We are
delighted to have been chosen to redevelop the City of Birmingham's schools,
thus providing the pupils and teachers with a much enhanced environment where
teaching and learning can flourish. This important success brings our PFI
schools portfolio to five and is the third schools project won this year.'

Councillor Les Lawrence, Birmingham's Cabinet Member for Education and Lifelong
Learning, said: 'We want to ensure teachers and pupils have the best possible
environment for teaching and learning as this clearly contributes to improved
performance. The first Public Private Partnership has been successful with 10
schools being rebuilt or refurbished across the City. We hope this scheme will
be equally successful with quality school buildings providing a focal point
within local communities.'

This is a flagship schools PFI project for Birmingham City Council which has
been awarded Demonstration Project status by the Constructing Excellence
movement in recognition of its commitment to sustainability and to sharing good
practice with fellow clients and partners.

Construction work, which will have a phased completion, with the first schools
handed over in 2007 and completion of all the schools in 2008, 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 £40 million over a 30-year period
will be undertaken by Haden Building Management, another Balfour Beatty
subsidiary.

This is Balfour Beatty's fifth major schools PFI project through Transform
Schools. Its projects at Stoke and Rotherham are in their fourth and second year
of operation respectively, while financial close on the project for North
Lanarkshire Council is expected this year and the Bassetlaw Grouped Schools PFI
contract for Nottinghamshire County Council in January 2005.

Last week, Balfour Beatty announced it had been appointed one of two framework
contractors by Manchester City Council in a 3-5 year partnering contract aimed
at delivering a substantial part of the Council's £160 million 'Building Schools
for the Future' programme.

                                      ENDS

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


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

1.  Balfour Beatty's other schools PFI projects are:

    -  for Stoke City Council (13 new schools and numerous new extensions in a
       25-year concession worth £153 million)

    -  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)

    -  for Nottinghamshire County Council (Bassetlaw Grouped Schools - five new
       secondary schools, a new special school and two new centres for post-16
       education in a 25-year concession worth £123 million in construction and 
       in excess of £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.  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.

5.  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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