Statement re LUL PPP

Balfour Beatty PLC
04 April 2003

BALFOUR BEATTY PLC



Balfour Beatty to Invest £70 Million of Equity in Metronet and Carry Out £1.2
Billion of Associated Construction and Engineering Contracts



  Financial Close and Operational Handover for Metronet Concessions in London
                     Underground Public Private Partnership



Balfour Beatty, the international engineering, construction and services group,
announces today that the Metronet consortium, in which Balfour Beatty is a 20%
shareholder, has reached financial close and secured operational handover for
its two 30-year PPP concessions for the London Underground.



Metronet has now taken responsibility for financing, upgrading, replacing and
maintaining the Bakerloo, Central, Victoria and Waterloo & City Lines (Metronet
Rail BCV) and the Metropolitan, District, Circle, Hammersmith & City and East
London Lines (Metronet Rail SSL).



Commenting today, Balfour Beatty Chief Executive, Mike Welton, said:



'After nearly four years of negotiation, consultation and planning, we are
delighted to become part of the London Underground PPP and to be able to play a
key role in creating a faster, safer, cleaner and more reliable London
Underground system.



'We believe that this will prove an attractive investment for Balfour Beatty,
with good returns for well-understood risks in what is, given our extensive
experience of working with London Underground, a very familiar operating
environment.  We have now also added to our order book downstream engineering
and construction contracts worth some £1.2 billion over the concessions' first 7
1/2 year period.'



Balfour Beatty will invest, from its own cash resources, a total of £70 million
in equity and shareholder subordinated debt in the two concessions over their
first 71/2 year period.  The substantial costs incurred by Balfour Beatty in
association with the Metronet bid have been refunded.  Balfour Beatty has also
received a developer's fee.



It is anticipated that Balfour Beatty's equity participation in the two
concessions will contribute approximately £7 million of profits at the pre-tax
level in the financial year ending 31 December 2003 and that long-term
investment returns will be broadly in line with those from its other major PPP/
PFI concessions.



In addition to returns on its investment, approximately £1.2 billion of
downstream contracting work has now been added to Balfour Beatty's order book,
which already stood at over £5 billion.  This includes all the new trackwork to
be undertaken in the concessions' first 71/2 period, with a value of
approximately £500 million.  It also includes civil engineering works and the
upgrading and modernisation of over 150 stations, worth a total of over £700
million to the Group over the next 71/2 years.



In line with its normal prudent accounting approach, the Group is not expecting
to recognise any material profit on its downstream construction work during the
first nine-month period.



Balfour Beatty estimates that with all relevant flows taken into account, the
concessions will produce, at minimum, a cash neutral position for the Group,
both in 2003 and for the first 71/2 year period in total.



Balfour Beatty is already a leading participant in the UK government's PFI/PPP
programme.  Its portfolio includes three major hospitals in Edinburgh, Durham
and London, three large-scale road schemes in Derbyshire, Yorkshire and the West
Country, the largest group schools PFI so far let in England for Stoke and the
provision of the high voltage power system for the London Underground, which
concession has been operational since 1998.





Enquiries to:

Tim Sharp

Tel: [phone]

www.balfourbeatty.com



There will be an investor and analyst briefing on Monday 7 April at 12.30 pm at
ABN AMRO, 250 Bishopsgate, London, EC2.



Notes to Editors



1.         Balfour Beatty is a specialist in infrastructure creation and care.
It provides engineering, construction and service skills to customers for whom
infrastructure quality, efficiency and reliability are critical.



2.         Before today's announcement, Balfour Beatty's order book exceeded £5
billion.  In 2002, its turnover in rail engineering and services, in which it is
a world leader, exceeded £830 million.



3.         Balfour Beatty had 2002 sales of £3.4 billion, pre-tax profits of
£118 million and year-end net cash of £67 million.



4.         Balfour Beatty has a long and successful record of working with
London Underground.  In 1998, it was awarded the concession, in joint venture
with SEEBOARD, to finance, operate, upgrade and maintain London Underground's
high voltage power distribution network.  In addition to undertaking trackwork,
cabling and other engineering projects for LUL, the company was responsible, in
joint venture, for the section of the new Jubilee Line between Green Park and
Waterloo in a contract worth over £350 million.




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