Re Contract

Serco appointed preferred bidder for £650m Sandwell environmental services
contract

12th August 2010

Serco Group plc (Serco), the international service company, is pleased to
announce that it has been appointed by Sandwell Metropolitan Borough Council
(Sandwell) as preferred bidder for its new Waste Improvement Plan contract. We
will provide refuse collection, recycling, and street cleaning services, and
deliver waste processing and disposal, including the construction of a new
waste transfer station. The 25 year contract is expected to commence in
November 2010, and is valued at around £650m.

Serco's innovative approach to this contract has resulted in the development of
an operational solution which responds to the needs and aspirations of Sandwell
and its residents. Under the contract, Serco will increase recycling rates, and
significantly reduce the amount of waste sent to landfill through the
development of an integrated waste processing and disposal solution using
best-in-class local partners. This will help the council to meet Government
recycling targets and reduce costs such as landfill taxes. We will also improve
services to residents in Sandwell by promoting street cleanliness across the
borough and improving bin collections.

We will work closely with the council towards helping it achieve its aims to
have by 2020 at least 60% of all waste recycled or composted, 35% of waste
turned into renewable energy and less than 5% sent to landfill. The service is
also expected to deliver a number of cost efficiencies throughout its term.

To meet these goals Serco will introduce a number of initiatives which will
include increasing the number of mechanical street sweepers, and introducing
recycling bins to all households with kerbside access allowing residents to
recycle more materials including plastics and cardboard. We will also introduce
a food waste recycling service in 2011.

Having carried out substantial public consultation during the bid process,
Serco will be responding with the introduction of innovations including our
`space saver' initiative, allowing residents choice and flexibility around bin
sizes according to their needs while maintaining weekly refuse collections.

We will also incentivise Sandwell residents to sustain a better environment by
introducing a fund to reward recycling efforts. A board selected from local
stakeholders will identify potential community projects for funding such as the
creation of community allotments and wildlife areas, and the refurbishment of
parks and play areas.

As part of the contract, the council's existing environmental services team
will transfer to Serco, providing the opportunity for long term job security
and for further training and development.

Councillor Derek Rowley, Cabinet Member for Safer Neighbourhoods, welcomed the
appointment of Serco and said: "This is great news for both Sandwell and Serco
but, most importantly, it's great news for the residents of Sandwell who will
benefit from cleaner streets and the introduction of environmentally friendly
state of the art recycling services. Waste services in Sandwell have needed to
be modernised for some time and this contract means within a few years we will
be delivering one of the best services in the country which is exactly what the
borough's residents deserve."

Christopher Hyman, Chief Executive of Serco Group, added: "Serco is delighted
to have been selected as preferred bidder for this important contract and we
look forward to making substantial improvements in these important services for
the Borough Council and the residents of Sandwell. This contract will represent
a significant development for our environmental services capabilities where we
have a strong track record of innovation, and for the delivery of high quality
and efficient services."

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.

Around the world 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 and nuclear, transport, welfare to work and the commercial
sectors.

Serco currently provides environmental services to 15 local authorities
throughout the UK and has achieved significant growth in recent years. This
contract represents a further development of our business, with the new
capabilities in waste processing and disposal.

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