AMP4 Water Contracts

Costain Group PLC
01 September 2004



Costain Group PLC

('Costain' or the 'Company')


Landmark AMP4 Contract Wins from Yorkshire Water and
Thames Water


Costain is pleased to announce that it has been selected as preferred bidder in
two framework agreements with Thames Water and Yorkshire Water to provide a
significant proportion of their respective Asset Management Period 4 ('AMP4')
works for the next five year regulatory period. AMP4 begins in April 2005
coinciding with the run-off of current AMP3 projects.

The final value of the contract awards is expected to be in the region of £350m
over five years, with the potential to extend the contracts for a further five
years.

For Yorkshire Water, Costain will carry out a majority of the utlility's capital
works programme in joint venture with Haswell Consulting Engineers.  Through the
new framework agreement, Costain will assess, review, design, construct and
commission all water and waste water capital expenditure up to an agreed level
within the East Riding operating area of all waste water assets and above ground
clean water assets.

For Thames Water, Costain and its supply chain will provide services and
delivery enhancements to London's water supply together with wastewater
treatment asset management in the south east areas.

In addition, Costain has been selected for a list of preferred suppliers for
both major process and major network contracts, allowing the Group to bid for
contracts similar to the current Perry Oaks/Iver South/Mogden scheme with a
value of £106m.

Stuart Doughty, Chief Executive, said:

'This is a excellent achievement. These are two major contracts which further
consolidate Costain's leading position in the UK water sector in line with our
strategic target of 50% of Group turnover being generated by our Asset
Management division by 2006.

'These contracts follow on from the success of Costain's AMP3 work for both
companies due to be completed within budget and ahead of schedule.  In addition
to the news from Thames Water and Yorkshire Water, we are hopeful of more awards
from the other utilities during the second half.'


                                                                1 September 2004

Enquiries:

Costain Group PLC                                            Tel: [phone]
    Stuart Doughty, Chief Executive
    Charles McCole, Finance Director
    Graham Read, Public Relations

College Hill                                                 Tel: [phone]
    Mark Garraway
    Matthew Gregorowski


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