Re Contract

Balfour Beatty PLC
16 November 2006


16 November 2006


              ARBITER'S GUIDANCE ON METRONET'S TUBE PPP CONTRACTS
              ===================================================

Balfour Beatty, the international engineering, construction and services group
has a 20% interest in Metronet Rail, the organisation responsible for the
renewal of nine of London's twelve tube lines.

As part of agreed contractual arrangements, the office of the Public Private
Partnership Arbiter published its guidance today in respect of Metronet's
performance over the first three years of its concession. The Arbiter's report
highlights some areas in which Metronet's organisation and performance require
improvement in order to be 'Economic and Efficient' under the contract.

Metronet and its owners have been addressing these issues for some time and are
well advanced in introducing new organisational and process arrangements to
improve its performance in line with the Arbiter's criteria.

Metronet's response to the Arbiter's guidance can be found on
www.metronetrail.com

                                      ENDS

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




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