Re Contract

Balfour Beatty PLC
03 April 2006


3 April 2006


             TWO NEW PFI SUCCESSES FOR BALFOUR BEATTY IN BIRMINGHAM
               WITH A COMBINED CAPITAL VALUE OF OVER £130 MILLION
               ==================================================

          Birmingham Schools and Sandwell Affordable Housing PFI Schemes
                             Reach Financial Close
                             ----------------------

Balfour Beatty, the international engineering, construction and services group,
announces today that it has reached financial close on its Birmingham Schools
PFI project, which has a capital value of £74 million. At the same time, the
Sandwell Metropolitan Borough Council affordable housing scheme, in which
Mansell will carry out £57 million of new build and refurbishment work in
conjunction with Riverside Housing, has also reached financial close.

Commenting today, Balfour Beatty Chief Executive, Ian Tyler, said:

'We are delighted to have reached financial close on projects which will greatly
enhance the learning environments of schoolchildren in Birmingham and deliver
sustainable improvements for the residents of Wednesbury South. These successes
further underpin our leading position in the education market and confirm the
potential for PFI as a procurement vehicle in the fast-growing affordable
housing sector.'

In Birmingham, the 30-year schools project will provide a total of 12 new and
refurbished schools, including two secondary schools, nine primary schools and
one early years centre. Balfour Beatty is investing £4 million of equity in the
project through its specialist vehicle, Transform Schools, which is a
partnership with Innisfree. The construction work on the project will be carried
out by Balfour Beatty Construction and Balfour Kilpatrick.

In addition to the construction programme, facilities management work to a value
approaching £50 million will be undertaken by Balfour Beatty subsidiary, Haden
Building Management.

Peter Farrell, Head of Education Asset Management for Birmingham City Council
and the Lead Client Officer for the contract, said:

'Birmingham City Council is delighted to close this deal which will rebuild a
further 12 city schools and enhance teaching and learning as a result. This is
part of our commitment to transforming teaching and learning across secondary
and primary school level over the next few years with schools and local
communities.'

At Sandwell, Mansell has a five-year contract which will involve upgrades and
improvements to all council housing on the Harvills Hawthorn and Millfields
estates in Wednesbury South. The scheme will see the refurbishment of 900 homes,
the demolition of 140 redundant properties and the building of 120 new homes for
sale. The work will enable Sandwell Metropolitan Borough Council to reach the
Government's Decent Homes Standard by 2010. Management and maintenance services
will run from 2006 to 2031.

                                      ENDS

Enquiries to:
Tim Sharp
Tel: [phone]
www.balfourbeatty.com


Notes to Editors
----------------

1.  This is Transform Schools' fifth PFI education concession. The others are in
    Stoke, Rotherham, North Lanarkshire and Bassetlaw and involve a total equity
    commitment of £28.5 million. The five schemes cover over 180 schools and 
    have a total construction value of over £500 million.

2.  Balfour Beatty has a portfolio of 22 PFI projects, three of which are at
    preferred bidder stage. These comprise five schools, seven hospitals, six
    road schemes, two London Underground concessions for infrastructure upgrade
    and power supply and a water scheme. The Directors of Balfour Beatty have 
    valued this portfolio at £289 million.

3.  Sandwell is Mansell's first major PFI affordable housing contract, in which
    market it is a leading player. In 2005, Mansell's revenue from affordable
    housing schemes was over £160 million. Its confirmed order book in the 
    sector is approximately £180 million, with another £400 million of potential
    work contained in existing framework arrangements.

4.  Balfour Beatty is a world-class engineering, construction and services 
    group, well positioned in infrastructure markets which offer significant 
    long-term growth potential. Its partnerships with public and private 
    customers generate secure, sustainable income. Its financial position, with
    significant net cash and with strong operating cash flows, offers continuing
    flexibility to add additional capacity and expertise to the business mix and
    to make appropriate investments in PPP and other long-term growth 
    opportunities.




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