Progress re GM Waste PFI

TEG Group (The) PLC
14 September 2007



For release                            14.30                 14th September 2007





                           The TEG GROUP PLC (TEG/L)

                            ('TEG' or 'the Company')





        Progress with Greater Manchester PFI Waste Services Procurement

                         Update on General Plant Sales



Further to the press release made by the Greater Manchester Waste Disposal
Authority ('GMWDA') on 7 September 2007 (www.gmwda.gov.uk/news.htm), The TEG
Group PLC, the AIM-listed cutting edge green technology company, which converts
organic wastes into natural organic fertiliser, confirms it has been advised
that it is the intention to conclude commercial contracts with its customer
Costain Limited ('Costain') in advance of Financial Close which is now projected
to occur in December. As outlined by the GMWDA in its press release, this will
be part of a commercial close process. Subject to the finalisation of detailed
agreements between GMWDA and Viridor Laing, this will allow contracts to be
placed with technology providers, such as TEG, to allow construction activities
to commence ahead of financial close.


On 29 January 2007, TEG announced that it is a principal sub-contractor to the
Viridor-Laing consortium that has been awarded preferred bidder status for the
Greater Manchester Waste PFI contract. TEG is the exclusive supplier of In
Vessel Composting ('IVC') technology to the consortium and following financial
closure, TEG will receive an order to supply all the IVC capacity in the Greater
Manchester region.


TEG is expected to build four plants as part of the consortium, over the period
from 2007 to 2010 with a combined capacity of 180,000 tonnes per annum,
producing 125,000 tonnes of compost product per annum. The plants will all
process green waste and kitchen waste collected from households in the Greater
Manchester region.


It is intended that the first plant to be constructed by TEG will be sited at
Waithlands, Rochdale. Planning permission has been secured which will allow
construction activities to commence following commercial closure of the
contract. The detailed contractual terms for the facility are close to
completion.


The three further plants to be constructed by TEG are progressively scheduled
for construction between the second quarter of 2008 and the second quarter of
2010. The planning application for the second site is due to be submitted in
September and the development of the two remaining sites is already underway in
anticipation of gaining planning approvals in 2008.


In addition, the Company is pleased to confirm planning approval has been
forthcoming for its contract with Gwynedd Council and that site clearance works
commenced on Monday 10 September 2007 in advance of the construction of the
£1.45m TEG Silo Cage plant. Contract signature is expected very soon and a full
announcement will be made in due course.


The Company has also been informed by two of its customers of planning decision
delays in respect of two further plant construction projects. It had been
anticipated that planning approval for both projects would be forthcoming in
2007 but the planning decision dates for the projects are now expected to be
December 2007 and January 2008. Consequently, TEG does not anticipate revenue
receipts from either project until financial year 2008. The combined value of
these two projects is approximately £3.5m.


Commenting for TEG, Chief Executive Mick Fishwick said:

'We are delighted that the decision has been taken by GMWDA to introduce a
commercial close procedure. While the exact timetable for completion of each of
the technology supplier contracts is still to be determined, we hope this
positive step will allow construction of the TEG plants to commence to schedule.
Given the scale and complexity of the PFI project, the progress made by GMWDA,
Viridor/Laing and Costain has been substantial and we are pleased to have
supported the process as far as we can in advancing the TEG projects to
schedule. We look forward to completing the contracts and to moving into the
construction and execution phase.'


'The delays to the implementation of other plant construction projects are
frustrating but unfortunately outside the control of the Company. Positively,
approval has now been forthcoming at Gwynedd and we anticipate approval for the
other 2 projects planned for 2007 by the end of the year or early in 2008. We
anticipate revenues will be deferred from 2007 but will strengthen the revenues
in 2008.'


'The Company remains extremely positive about its future development and can
report that the sales pipeline continues to grow. The Board is confident that
the frustrations and delays of the last 6 months will transform into very
positive revenues in 2008 and beyond'.





ENDS


Contact:


The TEG Group Plc Tel: [phone]

Michael Fishwick, Chief Executive


Adventis Financial PR Tel: [phone]

Tarquin Edwards 07879 458 364


Cannacord Adams (Nomad) Tel : [phone]

Chris Bowman






Editor's Notes:


TEG provides an in-vessel composting technology, which is one of the few
approved technologies capable of treating animal by-product (ABP) waste. Plant
economics are predominantly driven by the gate fees charged, rather than the
value of the end product (compost). The TEG process is an economic alternative
to landfill.


The Silo Cage system, one of the few technologies in Europe capable of treating
this waste, is a natural process producing compost as an end product, used as an
excellent soil conditioner that fertilises, retains moisture, provides structure
and reduces the incidence of plant disease. TEG's Silo-Cages are housed in
self-contained buildings, are not unsightly and are environmentally friendly.


Customers include local authorities, waste management companies, food
processors, farmers and landowners. The Company's expanding market is driven by
increasingly stringent EU and UK legislation regulating the treatment and
disposal of organic waste. Statutory targets for the diversion of waste from
landfill increase annually through to 2020, increasing TEG's market opportunity
year on year. The Waste Resource Action Programme estimates that 450 composting
plants will be needed by 2020 to satisfy local authority requirements alone, and
there is increasing demand from the private sector driven by ABP legislation.


NOFCO is a marketing company specialising in the development of end markets for
compost products, an important aspect of all plant developments and key to local
authority development. The company has an expertise in the development of
agricultural and horticultural markets and this capability is to be provided to
customers to enhance TEG's overall service offering.




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