Welsh Water Preferred Partner

Costain Group PLC
13 September 2004


Costain Group PLC

('Costain' or the 'Group')


Preferred Partner for Welsh Water AMP4 Contract


Costain announces that it has been selected by Dwr Cymru Welsh Water as one of
its preferred partners for the delivery of its Asset Management Programme. Asset
Investment and Asset Operations contracts worth more than £300m per year which
will run for up to 15 years, begin on 1 April 2005.

Costain was selected as one of a group of preferred partners who will work
together as part of an Asset Management Alliance, which will be responsible for
the overall delivery of the investment and operational contracts.  Costain will
be primarily responsible for civil construction projects in the north Wales
region.  The capital value of the contract to Costain is likely to be in the
order of approximately £20 million per annum for a ten-year period, with a
5-year performance review.

The selection as preferred partner follows an extensive tendering process by
Welsh Water including detailed analysis, site visits, interviews, qualitative
assessment and reviews and was based on those companies which could not only
provide the best service but could influence the overall shape of the working
arrangements in order to deliver long term service quality to its customers.

Stuart Doughty, Group Chief Executive, commented:

'This is another excellent result.  This announcement follows our recent
successes with Thames Water and Yorkshire Water and further strengthens our
leading position in the UK Water sector.

'The rigorous tender process, duration and scope of these contracts is an
illustration of how the Water Utilities are increasingly recognising the
benefits of entering into longer term framework agreements for the overall
provision of better customer service.

'We continue our negotiations for securing further frameworks with a number of
the Water Utilities and look forward to reporting on these in due course.'

                                                               13 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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