Re Contract

Balfour Beatty PLC
13 July 2005





13 July 2005




                    BALFOUR BEATTY REACHES FINANCIAL CLOSE ON
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                 £127 MILLION BASSETLAW GROUPED SCHOOLS PROJECT
                 ==============================================

                                        
Balfour Beatty, the international engineering, construction and services group,
announces today that its education PFI concession company, Transform Schools,
has reached financial close for the 25-year, £127 million Bassetlaw Grouped
Schools PFI concession for Nottinghamshire County Council.

The project will involve four new secondary schools, a new special school and
two new centres for post-16 education in Retford and Worksop and a new secondary
school in Tuxford. It will also create two new leisure centres for Bassetlaw
District Council. Phased completion of the new facilities is scheduled for 2006
and 2007. Balfour Beatty will invest some £7 million of equity in the project.

Commenting on the award, Balfour Beatty Chief Executive, Ian Tyler, said:

'We are delighted to be able to proceed in providing new facilities in Bassetlaw
and to support Nottinghamshire County Council's objective of giving pupils and
teachers an enhanced environment where learning can flourish. The new facilities
will bring benefits to the schools and their wider communities. Our objective is
to bring the same level of professionalism and service to this task as the work
we are carrying out in our Stoke, Rotherham and North Lanarkshire Schools PFIs.'

The key objectives for Nottinghamshire County Council are the replacement of
deteriorating and unsuitable accommodation, the improvement of educational
attainment and post-16 staying-on rates and improved community facilities.

Construction work 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 £100 million, will be undertaken by Haden
Building Management, another Balfour Beatty subsidiary. This will include
maintenance, catering, cleaning and grounds maintenance.

This is Balfour Beatty's fourth major schools PFI project through Transform
Schools, in partnership with its joint investor, Innisfree Ltd. Its projects at
Stoke and Rotherham are proceeding very successfully, while financial close on
the project for North Lanarkshire Council was achieved last month.

In the recent 2005 Public Private Finance Awards, Transform Schools' Rotherham
concession won the 'Best Community/User Involvement in a Project' Award for its
achievements through consultation with the project's key stakeholder groups,
including school managers, governors and prospective users.

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. The scheme has now grown to accommodate 13 new
schools and numerous new extensions.

                                      ENDS

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

Notes to Editors

1. In addition to Stoke, Balfour Beatty's other schools PFI projects are:

   - 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).

   - for Birmingham City Council, Transform is preferred bidder on a scheme 
     worth £56 million which will provide 12 new and refurbished schools.

2. Balfour Beatty is carrying out 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. Balfour Beatty is one of two construction partners to Manchester City Council
in its 'Building Schools for the Future' programme in a 3-5 year contract likely
to be worth up to £80 million. The work will involve substantial redevelopment
of Manchester's secondary school stock.

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,
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.





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