Re Contract

Kier Group PLC
03 October 2007


3rd October 2007


                 KIER ADDS £425 MILLION TO ITS SUPPORT SERVICES
                                FORWARD WORKLOAD


Kier has been appointed preferred bidder by Stoke-on-Trent City Council to
deliver a £400m joint venture contract to carry out repairs and maintenance on
the city's 20,000 council-owned houses through a newly formed joint venture
company in which the council will take a 20% share.  The contract term is for
ten years with an option to extend for a further five.

Over 540 council employees will transfer to the new joint venture company which
will become a very significant addition to Kier's existing and successful
long-term partnerships with local authorities including Islington, Sheffield and
more recently Harlow.

The joint venture will also involve the continuation of all works on the
government's Decent Homes programme for three years, bringing kitchens,
bathrooms, doors and central heating up to the standard.

Also included in the agreement will be repairs and maintenance to the city's
municipal buildings which Kier will control using its asset management team.

The new arrangements come into effect in the New Year.

Kier has also signed a £25 million agreement with Hammersmith & Fulham
Management Services Limited (an arm's length management organisation for
Hammersmith & Fulham Borough Council) to carry out repairs and maintenance on
7,165 council-owned houses for the next five years.  Twenty-eight employees have
transferred to Kier as a result of the agreement which commenced on 1 October
2007.

Kier Group plc chief executive John Dodds said: "We're delighted to have been
selected as preferred bidder by Stoke-on-Trent City Council and to have entered
into contract with Hammersmith & Fulham Management Services Limited. We are
looking forward to working with both clients to improve services and deliver the
aspirations of all involved.'


                                     -Ends-

Enquiries to:

Matthew Moth/Caroline Sturdy
Madano Partnership                               0207 593 4000



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