PFI Project

Shanks Group PLC
26 November 2004


26 November 2004

Shanks Group plc

Dumfries & Galloway (D&G) PFI project

Shanks Group plc ('Shanks), a leading European independent waste management
company, has today signed a 25 year contract with Dumfries & Galloway (D&G)
Council.

Shanks will be responsible for circa 95,000 tonnes per year of municipal solid
waste and will ensure compliance with the requirements of the European Landfill
Directive and the UK legislation for biodegradable municipal solid waste. The
contract will provide an initial full year revenue of £6m and total revenues of
£270m over its 25-year life.

New facilities will be built and the existing infrastructure developed securing
existing employment and creating a number of new jobs in Dumfries & Galloway.
The initial capital expenditure on the project will be circa £30m over the next
3 years.

The project will be financed via a special purpose vehicle (SPV), Shanks
Dumfries & Galloway Ltd which will own and operate all the facilities. It is
envisaged that the SPV will be funded circa 85% by project finance debt which
has recourse only to the contract cashflows, and the balance will be provided
from Shanks existing resources.

Commenting on the project, Michael Averill, Group Chief Executive of Shanks
said: 'Shanks is delighted with this contract, its third PFI project for waste.
It reinforces the Group's view that the technology developed with our Italian
partner Ecodeco represents the most effective and deliverable waste treatment
option for the 21st Century.

Shanks is committed not only to environmentally and technically sustainable
waste management solutions but also to increased shareholder value, through long
term visible revenue streams'.

Notes to Editors

The project will use the same fundamental mechanical biological technology (MBT)
developed in conjunction with Ecodeco of Italy as in the East London Waste
Authority contract. Many other councils are evaluating the potential of this
technology for their own needs.
The main developments in D&G will be:
                           
     •    The construction of a MBT plant capable of processing approximately
          60,000 tonnes per year.

     •    The operation, completion and restoration of existing Council landfill
          sites.

     •    Provide a new composting plant near Stranraer.

     •    Take over and operate the Council's existing transfer station and,
          subject to planning permission provide a new transfer station.

     •    Take over and operate 10 Civic Amenity sites.

                                    - Ends -

For further information contact:

Michael Averill
Group Chief Executive
Shanks Group plc
Telephone [phone]

Or

Ginny Pulbrook
Citigate Dewe Rogerson
Telephone [phone]


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