£120m Outsourcing Contract with Islington

Kier Group PLC
22 June 2000

        KIER SECURES £120M OUTSOURCING CONTRACT WITH
                 LONDON BOROUGH OF ISLINGTON

Kier  Group plc, the international construction and services
company,  announces that its Facilities Management  division
has been selected as a trading partner by the London Borough
of  Islington  for  a major outsourcing contract  under  the
government's 'best value' programme.

Kier  will  establish a partnership company with the  London
Borough  of  Islington to undertake a programme of  building
and  housing  maintenance worth £120m over ten  years.   The
partnership  company  will  take over  activities  from  the
Council's current in-house provider and is expected to start
operations  in  October  2000.   Some  530  employees   will
transfer  to the new company, which will trade  as  part  of
Kier's rapidly-growing FM services division.  Its activities
will  comprise  day-to-day repairs  to  the  housing  stock,
housing voids, gas maintenance, routine maintenance such  as
periodic painting, and building cleaning.

Kier Group chairman Colin Busby commented: 'The 'best value'
initiative   is  set  to  transform  many  local  government
activities and it is very exciting that Kier has set up this
long-term  housing maintenance partnership  with  Islington,
which may well be repeated elsewhere.  This partnership also
underlines  Kier's commitment to FM services  following  the
recent signing of support services contracts worth £165m  at
the Neath & Port Talbot Hospital and Pembroke Dock CP School
in South Wales under PFI.'

Enquiries:

Colin Busby
Chairman and Chief Executive
Kier Group plc                     Tel: [phone]


Caroline Sturdy
Associate Director
Bell Pottinger Financial           Tel: [phone]