Contract Award

Serco joint venture signs Northern rail train operating franchise

Serco Group plc's ('Serco') 50:50 joint venture with NedRailways BV today has
signed a contract with the Strategic Rail Authority and five Passenger
Transport Executives to operate the Northern rail train operating franchise.

This new franchise will provide inter-urban commuter and rural services
throughout the north of England. Scheduled to start on 12 December 2004, the
franchise will run for up to eight and three quarter years, with the final two
years dependent on achieving performance targets.

The Serco-NedRailways contract is expected to have a turnover of approximately
£4billion over the eight and three quarter year period. After initial
mobilisation, the service is expected to be earnings neutral for Serco in 2004
and both earnings and cash positive from 2005.

Building on the success of its other operations in the UK, Serco-NedRailways is
focused on delivering year-on-year improvements in train punctuality and
performance, modernising ticketing systems and improving the availability and
reliability of the rolling stock.


Serco Chief Executive Chris Hyman said: 'Serco's Integrated Transport business
is going from strength to strength. Its track record of successfully delivering
improved services to passengers can now be extended to millions of people
across the north of England through Serco-NedRailways.'

Serco, twice winner of the UK's National Rail Operator of the Year award, has
extensive experience of rail passenger services and change management through
operating Docklands Light Railway, Manchester Metrolink, Copenhagen Metro and
Great Southern Railways in Australia. Serco-NedRailways operates Merseyrail,
having taken the concession over in July 2003.

For further information please contact Serco Group plc:


Dominic Cheetham, Director of Corporate Communications: Tel: T: +44 (0) 1256
745900

Richard Hollins, Head of Investor Relations: Tel: T: [phone]

Notes to Editors

Serco is one of the world's leading public service companies operating on a
global basis in a diverse range of sectors including: public transport and
traffic management, defence and aerospace, justice, science, health, education
and local government.

The Northern franchise covers local and regional train services across Northern
England, providing transport for the conurbations of Greater Manchester, South
and West Yorkshire, Tyne, Tees and Wear and parts of Merseyside. It also
provides services into a number of National Parks and access to coastal areas,
including the Esk Valley line to Whitby and the Cumbrian Coast route.

At the heart of the operations are the city regions of Leeds, Liverpool,
Manchester, Newcastle and Sheffield complemented by a large number of other top
leisure and tourism locations including Blackpool, York, four national parks
and a wide range of top-class sporting venues.

Northern's train services will operate over 1675 miles of the national rail
network, and its staff of over 4000 will focus on passenger needs through the
operation and maintenance of 265 diesel and electric trains, and 475 stations.

More information on Serco can be found at www.serco.com