Re PFI Contract

TEG Group (The) PLC
29 January 2007



For release                         8:30am                      29 January 2007





                            The TEG GROUP PLC (TEG)
                            ('TEG' or 'the Company')


                   TEG Preferred Bidder in Greater Manchester
                          to Build 4 Composting Plants

                       TEG's Largest Order in its History



The TEG Group Plc ('TEG' or 'the Company'), the AIM-listed cutting edge green
technology company, which converts organic wastes into natural organic
fertiliser, announces 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. Assuming the consortium
achieves expected financial closure TEG will receive an order to supply all the
IVC capacity in the Greater Manchester region.


TEG is expected to build 4 plants as part of the consortium, over the period
from 2007 to 2010. The combined capacity of the plants will be 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. Depending upon the final scope of supply, the total
value of the construction projects to TEG will be up to £35m over the period
2007 to 2010.


The PFI contract is the largest waste management contract offered to date in
Europe. Total capital investment will be in excess of £300m and the overall
contract value is projected to be £3bn. In addition to composting, the scope of
supply for the consortium includes anaerobic digestion, mechanical biological
treatment, material recycling facilities and waste transfer operations. Costain
Limited has been retained to manage the construction projects on behalf of the
consortium and will be TEG's immediate customer. It is anticipated that
financial closure will be achieved by June 2007. Contracts will become binding
at that point.


Commenting for TEG, Chief Executive Mick Fishwick said 'we are absolutely
thrilled to be part of the consortium that has won such a landmark contract and
we are looking forward to working with companies with the prestige of Viridor,
Laing and Costain. This is a major achievement for TEG; to be part of such a
huge contract is a tremendous leap forward for us and it establishes us once and
for all as one of the leaders in the composting and recycling sector. Quite
apart from the contracts, worth up to £35m over 2 to 3 years, this is also a
huge endorsement for the TEG technology and our ability to deliver major
projects.'


'Greater Manchester Waste has a tremendous vision for waste management in the
region and as a local company TEG is proud to be a part of it. We look forward
to 'going live' later in the year'.



ENDS


Contact:


The TEG Group Plc                           Tel: [phone]
Michael Fishwick, Chief Executive


Adventis Financial PR                       Tel: [phone]
Peter Binns/ Tarquin Edwards                07768 392 582 / 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.




                      This information is provided by RNS
            The company news service from the London Stock Exchange