Re Contract

Balfour Beatty PLC
20 June 2005


20 June 2005


            BALFOUR BEATTY AWARDED £100 MILLION FIVE-YEAR EXTENSION
                          TO SOUTH WEST WATER CONTRACT
                          ============================
                                        
Balfour Beatty, the international engineering, construction and services group,
announces today that Balfour Beatty Utilities, its specialist supplier of
investigation, design, construction and commissioning services to the gas, water
and wastewater sectors, has successfully negotiated the option to extend its
existing, seven-year Agreement for Integrated Water Distribution Services with
South West Water. The five-year extension is likely to be worth in excess of
£100 million.

Commenting today, Balfour Beatty Chief Executive, Ian Tyler, said:

'This contract extension is the latest in a series of successes for Balfour
Beatty Utilities following regulatory reviews in the gas and water industries.
We are delighted to commit ourselves to a further five years in partnership with
South West Water, with whom we have a first-class relationship.'

The five-year agreement covers the delivery of South West Water's clean water
infrastructure programme. This work will include rehabilitation, minor capital
works, leakage services, metering, reinstatement and repairs and maintenance,
and will be worth some £20 million per annum.

The operating areas for the project include Exeter, Newton Abbot, Torbay and
North Devon.

Over the last six months, Balfour Beatty Utilities has now secured over £900
million of work in major new contracts for National Grid Transco, United
Utilities, Anglian Water and Severn Trent Water and through the extension of
their contracts for South West Water and Yorkshire Water.

                                      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 has, since April 2005, been working in partnership with
    National Grid Transco under an eight-year contract, worth approximately
    £380 million, to replace Victorian metallic gas mains in the Greater 
    Manchester Region with modern pipework systems.

3.  Balfour Beatty will begin work in July 2005 on a £300 million contract to
    undertake clean water, wastewater and electricity design, construction,
    rehabilitation and maintenance work for United Utilities in the North West.



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