Re Contract

Balfour Beatty PLC
08 June 2005


8 June 2005


             BALFOUR BEATTY REACHES FINANCIAL CLOSE ON £140 MILLION
                      NORTH LANARKSHIRE SCHOOLS PPP PROJECT
                      =====================================

Balfour Beatty plc, the international engineering, construction and services
group, announces today that it has reached financial close on North Lanarkshire
Council's Education 2010 PPP schools project. The project involves capital works
to the value of approximately £140 million and over £100 million of long-term
service revenue.

The 31-year concession involves the construction of 21 new schools, including
three large secondary schools in Airdrie and Coatbridge, six primary schools and
a further 12 primary schools provided over six joint campus facilities. Also,
there is a potential for a further three schools to be constructed.

Commenting on today's announcement, Balfour Beatty Chief Executive, Ian Tyler,
said:

'We are delighted to be working in partnership with North Lanarkshire Council in
realising its objective to provide the very best education opportunities for the
area. Balfour Beatty will provide the Council with a greatly enhanced education
environment through the design, construction and servicing of new, modern,
state-of-the-art buildings and facilities. We intend to bring the same level of
professionalism and service as we are providing through our public-private
partnerships in Stoke and Rotherham schools.'

North Lanarkshire Council Leader, Councillor Jim McCabe, said:

'I am pleased to report that after a lot of hard work behind the scenes by the
Council and Transform Schools, we are a step closer to providing brand new
schools and community facilities for the people of North Lanarkshire.'

Balfour Beatty will invest £8 million of equity in the project. Balfour Beatty
Capital Projects and its joint venture partner, Innisfree Limited, have
established Transform Schools (North Lanarkshire) Ltd as the concession company.
This is the highest value concession contract awarded to Transform Schools,
which now has responsibility for providing services to over 150 schools in
England and Scotland.

Construction work by a joint venture of Balfour Beatty subsidiary companies,
Balfour Beatty Construction and Balfour Kilpatrick, began under an advance works
contract in October 2004. Completed schools will be handed over between January
2006 and October 2008. Facilities management for a range of hard and soft
services will be provided by Haden Building Management, Balfour Beatty's
building management and building maintenance arm.

Balfour Beatty is preferred bidder on two further schools PPP projects, in
Nottinghamshire and Birmingham, which are expected to reach financial close
during 2005.

                                      ENDS

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


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

1.  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, sustainable 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 and other long-term
    growth opportunities.

2.  Balfour Beatty recently announced the completion and delivery of two
    ground-breaking PFI projects, with a combined value of £357 million. The 
    M77/Glasgow Southern Orbital road scheme and Phase One of the University 
    College London Hospital projects were both completed on budget and on time.

    -  The £132 million M77 extension and Glasgow Southern Orbital road is the
       biggest ever single road project in Scotland and was completed and 
       opened to traffic in only 24 months. The new roads will significantly 
       reduce journey times between Glasgow and Ayrshire and replace an 
       existing accident blackspot, the A77.

       Connect, a wholly-owned subsidiary of Balfour Beatty, will now maintain 
       and operate the road on behalf of the clients, the Scottish Executive, 
       East Renfrewshire Council and South Lanarkshire Council, for a 
       concession period of 32 years.

    -  Balfour Beatty, as a key partner in the Health Management (UCLH) joint
       venture, also handed over a new teaching hospital for the University 
       College London Hospitals Trust in April, on budget and on time.

       Balfour Beatty was responsible for the £225 million project to design 
       and build a new teaching hospital, under the Government's private 
       finance initiative.

       The first phase of the project involved designing and building an 
       18-storey, 669-bed hospital which will house facilities, including 
       accident and emergency, day-care and wards, from the existing UCLH and 
       Middlesex Hospitals.




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