Re Contract

Carillion PLC
21 June 2001

Carillion wins £200 million Highways Agency 'showcase' contracts

U.K. construction to services leader Carillion has won two major contracts
from the Highways Agency - totalling over £200 million - which aim to
transform the maintenance of some of Britain's busiest roads.

The two contracts for maintaining key areas of the motorway and trunk road
network in the South East, including the whole of the M25, were won against
stiff competition and significant factors in the success were the company's
proven track record on quality and the innovative features Carillion plans to
introduce -

These include -

  * Fleets of incident response vehicles placed around the networks,
    enabling crews to get quickly to an incident and, working alongside the
    emergency services, identifying actions needed to speedily resolve
    problems.
  * The purchase of 32 new state-of-the-art gritting vehicles - at a cost of
    around £2 million.
  * Introducing a special solution to coat the salt as it is spread by the
    gritters, helping it to stick to the road, thereby ensuring there is less
    wastage and a reduction in environmental impact.
  * All of the incident response vehicles and gritters fitted with satellite
    tracking devices to help controllers direct the nearest vehicles to an
    incident.
  * The formation of an M25 road user group to allow organisations whose
    members use the motorway to discuss specific issues.


    The two contracts, which are effective from September 1 and will run for
    five years, are for -

    Area 5 - covering the whole of the M25 and taking in 530 kilometres of
    motorways and trunk roads in Berkshire, Oxfordshire, Buckinghamshire,
    Hertfordshire and Essex.

    Area 8 - covering over 1,000 kilometres of motorways and trunk roads, in
    the Home Counties and East Midlands, including large stretches of the M1,
    M11, A1M and A14.

    Carillion Highway Maintenance director Tony Gates, says, Area 5 provides
    an excellent opportunity to revolutionise the way highway maintenance
    services are provided, focused on delivering ultimate benefits to the
    user.

    'The M25 makes Area 5 a high profile network nationally and
    internationally and Carillion will make it a showcase for all that is
    excellent in highway maintenance. We will ensure that Area 5 is a network
    the Highways Agency can be proud of.'

    The Area 8 contract is a new style of contract offering a 'one-stop-shop'
    approach which breaks down the old two tier system that involves the
    maintenance contractor undertaking work only when authorised by a Highways
    Agency appointed agent. The new MAC contract sees Carillion and URS
    working in partnership with the Agency, identifying necessary work and
    carrying it out.

    Tony Gates adds, 'We believe the new approach will bring significant
    improvements to the way Britain's key road network is maintained in the
    future. Both Carillion and URS have considerable experience in this field
    and by working in partnership we will be able to deliver an even better
    service.'

    Built into the new contract will be strong audit systems covering
    technical, quality, financial and IT aspects of the work. In addition the
    Carillion-URS team will have to meet a large number of key performance
    indicators set by the Highways Agency.

    Carillion chief executive John McDonough says, 'We are delighted to be
    offering the Highways Agency quality-driven solutions to their strategic
    aims. This type of service contract is an excellent example of the
    direction we are taking.

    'It clearly matches our strategy and objectives and is a perfect
    demonstration of our corporate values in practice. We look forward to the
    operation being a complete success. As a winning combination, our joint
    venture with URS will now bid for further MAC opportunities.'

    For further information contact John Davies or Jane Smith on 01902 316444

    Note to editors

    Carillion is one of the UK's leading construction to services businesses
    with an annual turnover of around £2 billion. Its key operations cover
    five main areas - Private Finance, Infrastructure Management, Services,
    Capital Projects and Building. Its road maintenance activities include
    contracts for routine and rapid response maintenance for around 22 per
    cent of the Government's motorway and trunk road network, plus six Local
    Authority road networks.

    ends