Re Contract

Carillion PLC
7 February 2002

Carillion consortium gets go-ahead for £190 million higher education Public
Private Partnership project


Construction to services company Carillion has reached financial close on a £190
million private finance project to provide the University of Hertfordshire with
en-suite accommodation for 1,600 students along with extensive sports facilities
at its new de Havilland Campus at Hatfield.

This is the largest project in this sector to date for Carillion, which is a UK
leader in Public Private Partnerships in the secure establishments, health,
transport and higher education sectors, and increases its PPP related order book
to around £2.75 billion.

The project was financed by a listed, index-linked bond guaranteed by FSA and
arranged by the Royal Bank of Scotland Group plc, who is also a shareholder
alongside Carillion.

Carillion will be providing a fully integrated service, including the
construction of the new complex for completion in September 2003 and
subsequently maintenance and facilities management over the 30-year concession
period. Carillion will provide all of the services to the new accommodation
under a long term contract. These services include security, estates
maintenance, housekeeping, catering and ground maintenance.

John McDonough, Carillion Group Chief Executive, said, 'This project will
provide the University of Hertfordshire with some of the best facilities in the
country.

'Developing our portfolio of PPP projects to deliver high quality, value for
money services to our customers, is a key part of our strategy for growth. We
now have sixteen financially closed projects, of which eleven have already moved
successfully into the operational stage, including a 210 bed Medicine for the
Elderly Unit at the Southern General Hospital, Glasgow, due to be officially
opened in mid February.'

Professor Neil Buxton, Vice-Chancellor, University of Hertfordshire, said, 'The
new campus will provide the University with leading edge facilities that are in
line with the high-expectations of the modern day student.'

In addition to the PFI project, Carillion is also undertaking the construction
of the remainder of the campus site, a development the University is carrying
out in partnership with Arlington Securities plc. This work, valued at around
£48 million, comprises new faculty buildings, boasting state-of-the-art teaching
facilities and a learning resources centre, which houses a 500 seat auditorium
that will enable the University to provide high quality conference facilities,
and the expansion of its arts programme.

Notes to editors

1. Carillion Services core business involves delivering integrated facilities
services solutions to support all aspects of the built environment. The business
focuses on developing strategic partnerships with its customers, taking
responsibility for a wide range of their non-core services, from cleaning and
catering through to estates management and building maintenance.

Established as a leading UK FM company in both the public and private sector,
Carillion Services offer:

  • Integrated FM solutions
  • Property Management Services
  • Management Services
  • Services provider under PFI/PPP schemes.

2. Carillion Private Finance has a portfolio of 16 signed projects (11 of which
are already in operation) that are expected to generate £2.75 billion of
turnover for Carillion Group companies over the next 30 years. These projects
include the first UK privately financed prison, the first secure training centre
and one of the first roads.

Carillion's first privately financed higher education project involved the
provision of 664 bed spaces, catering, bars and a social area, all with
associated car parking spaces, at the University of Greenwich in South East
London.

3. The development for the University of Hertfordshire is one of the major
Higher Education Pathfinder Projects. As a means of promoting PPP in Higher
Education, the Higher Education Funding Council for England gives financial
support to institutions to develop the schemes to attract commercial partners.
Pathfinders are eligible for up to 50 per cent of the cost of professional fees,
advice and guidance from the HEFCE and a 'signing-off' procedure. This is
designed to make PPP projects more attractive to private sector bidders by
providing some assurance that the project represents a well thought-out and
realistic PPP opportunity.

4. The new sports facilities at the University of Hertfordshire include a 25
metre, eight-lane swimming pool, a main sports hall with 12 badminton courts, an
ancillary sports hall with four-lane indoor cricket, two squash courts, a
fitness centre and a sports bar with seating for 100. The project also includes
a full-size multi-purpose artificial turf pitch and grass pitches. In addition,
there will be a refectory with seating for up to 500.

5. The consortium's advisers for the Hatfield project include Ashurst Morris
Crisp (legal) and Bank of America (financial). Architectural and design services
are provided by Austin-Smith: Lord and TPS Consult.



For further information:           John Denning, Director of Corporate Affairs
                                                 01902 316426



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