Re Contract

Serco Northern Rail joint venture awarded £530m two year franchise extension

13 May 2010

Serco Group plc (Serco), the international service company, announces that
Northern Rail, its 50:50 joint venture with Abellio, has secured a two year
extension to its train operating franchise on the same terms as its existing
contract.

The UK Department for Transport has now confirmed that Northern Rail will run
the franchise until September 2013. The two year extension, which is valued at
approximately £530m, follows the significant performance improvements that
Northern Rail has achieved since the franchise began in December 2004. Since
2004, punctuality has improved by nearly 8% to 91.6%, meaning that on average
200 more trains each day now arrive on time than in 2004, while passenger
numbers have increased by 34% to 85 million in 2009.

Christopher Hyman, Chief Executive of Serco Group, said: "We have a strong
record of providing high quality rail services in the UK and internationally.
Our award winning services are recognised for high levels of performance,
punctuality and passenger care, and owe much to the commitment and dedication
of our people. We are delighted that the strong performance of our partnership
with Abellio has been recognised with this two year extension of the Northern
Rail franchise."

Separately, an industry-wide review by the Office of the Rail Regulator has led
to reductions in track and other access charges levied by Network Rail on Train
Operators, and the matching and equal subsidy revenue. These changes will have
no effect on the profits or cash flow generation of either our Northern Rail or
Merseyrail franchises. However, Serco's current share of both the Network Rail
charges and the matching and equal subsidy revenue of these 50% owned joint
ventures will reduce by approximately £35m in 2010, and approximately £55m per
annum thereafter. This change has been accounted for in calculating the
approximate £530m value of the Northern Rail franchise extension as above.

Ends

For further information please contact Serco:

Charles King, Head of Investor Relations T [phone]

Dominic Cheetham, Director of Corporate Communications T [phone]

Marcus De Ville, Head of Media Relations T [phone]

About Serco

Serco is a FTSE 100 international service company, which combines commercial
know-how with a deep public service ethos.

We improve essential services by managing people, processes, technology and
assets more effectively. We advise policy makers, design innovative solutions,
integrate systems and - most of all - deliver to the public.

Serco supports governments, agencies and companies who seek a trusted partner
with a solid track record of providing assured service excellence. Our people
offer operational, management and consulting expertise in the aviation, BPO,
defence, education, environmental services, facilities management, health, home
affairs, information and communications technology, knowledge services, local
government, science, transport, welfare to work and the commercial sectors.

More information can be found at www.serco.com

About Northern Rail

Northern is the biggest train operator in Britain, providing 2,500 local and
regional train services every day across the north of England, serving a
population of nearly 15m.

Northern is operated in a joint venture by Serco and Abellio (formerly
NedRailways). This joint venture combines Serco's world-class service
credentials and Abellio's unrivalled rail industry expertise. Serco has run the
highly successful Docklands Light Railway since 1997 while Abellio's parent
company, NS Dutch Railways, carries over 1.1 million passengers every day in
the Netherlands. In addition to Northern Rail, Serco and Abellio have the
25-year concession for Merseyrail, which provides urban train services in
Merseyside.

Northern Rail's franchise contract started in December 2004 and was due to run
until September 2011, with provision for an automatic two-year extension for
meeting operational performance targets. Those targets were for cancellations,
delay minutes caused by Northern and providing agreed train capacity on peak
services between May 2009 and April 2010. Northern exceeded the targets for all
three measures. The two-year extension will run from September 2011 to
September 2013.