Aircraft Carrier Alliance

Babcock International Group PLC
14 December 2005


14 December 2005


Peter Rogers                               Andrew Lorenz or Richard Mountain
Babcock International Group PLC            Financial Dynamics
Telephone [phone]              Telephone: [phone]

Babcock Involvement in Aircraft Carrier Alliance

Commenting on Babcock International PLC's ('Babcock') involvement in the
Aircraft Carrier Alliance, Peter Rogers, Chief Executive, said:

'We are delighted that Babcock has been selected as a member of the Aircraft
Carrier Alliance and that its integration facilities in Rosyth will be engaged
in delivering, with our partners, the largest and most powerful warships ever
constructed in the UK.'

Attached to this statement is the MoD Press Notice which specifies and confirms
Babcock's position as a member of the Aircraft Carrier Alliance.


                                    - ends -

Notes to editors:

Babcock Involvement in Aircraft Carrier Alliance

Babcock will construct the bow block and carry out the associated detailed
design.  The CVF will be assembled, set to work, and commissioned at Babcock's
Rosyth facility with the block hook-up being managed by Babcock.  In addition
Babcock will support the Alliance in procurement and other elements of the
programme.  Initial work will commence immediately with engineering and
preparatory activity as lead in to the main construction programme.

Babcock Engineering Services at Rosyth supports the activities of customers in
the defence, oil and gas, marine and supply chain service markets.

The division, amongst other activities, refits Royal Navy warships and in recent
years has supported a number of Royal Navy warships, in particular the serving
aircraft carrier fleet for which Babcock was awarded a 'gold standard' for the
work performed in conjunction with our Ministry of Defence and Royal Navy
partners by the National Audit Office.

To support this activity Babcock Engineering Services has developed an extensive
infrastructure and skilled workforce - the facilities at Rosyth include three
docks and a synchrolift within a unique closed basin facility, possessing the
appropriate footprint to serve the requirements of the programme.

About Babcock International Group PLC

Babcock International Group PLC is an asset management business. We manage fixed
infrastructure and mobile assets.  Babcock integrates labour, technical
capabilities, systems and supply chain partners to meet the outsourcing needs of
customers for 'mission-critical' capabilities.

In the year to 31 March 2005 sales from continuing business were £745 million.
In June 2004 Babcock acquired the Peterhouse Group which brought; Rail and
Networks to the Group.

The Group operates across five core business segments:

Defence Services, supplying facilities management, equipment support and
training services to the armed forces.

Technical Services, providing engineering and logistical support to both the
defence and civil sectors in the UK.

Engineering and Plant Services supplying design, installation and maintenance
support to the energy sector in Africa and the US.  It also holds the Volvo
franchise for construction equipment in Southern Africa.

Rail, providing design, renewal and installation services for the UK rail
infrastructure.

Networks, supporting the design, maintenance and renewal of power transmission
and cellular telecommunications networks in the UK.

Babcock's head office is in London and the Company's shares are quoted on the
London Stock Exchange in the support services sector (EPIC:BAB).  For further
information, please visit Babcock's website at www.babcock.co.uk.


MoD Press Notice

14 December 2005


NEW ALLIANCE STRUCTURE DECIDES ON SHIPBUILD STRATEGY AS FUTURE AIRCRAFT CARRIER
PROJECT MOVES INTO NEXT PHASE

DEFENCE SECRETARY John Reid today announced a series of major developments in
MoD's multi-billion pound programme to build a new class of aircraft carrier for
the Armed Forces.
     
•    The current carrier Alliance team of MoD, BAE Systems, Thales and KBR, is 
     to be joined by VT Group and Babcock.

•    Plans for the construction and assembly of the ships at Alliance members' 
     yards have been agreed.

•    MoD is to spend some £300M to develop the design of the ships to the point 
     at which manufacturing can begin.

•    Commitment to some long-lead items for the ships will be made, where
     necessary, to maintain the programme.

•    It is also planned to explore, with the same companies, encompassing 
     in-service support for the new carriers and the existing carriers through 
     to their out of service dates.

Mr Reid said:

'These are major steps forward for the future carrier project.  Work will now
commence on finalising the delta design, which will ultimately provide the UK
Armed Forces with the largest and most powerful warships ever constructed in the
UK, and an expeditionary capability unparalleled outside of the US.'

As part of today's announcement, I am allocating some 60% of the ships'
construction to named UK yards: BAE Systems at Govan and Barrow; VT in
Portsmouth and Babcock in Rosyth. I can also confirm final assembly of both
carriers will be at Rosyth.

At the same time there is a substantial opportunity for the involvement of other
UK shipyards in the remaining parts of the build programme that will be open to
competition.  This could go well beyond traditional shipbuilders since the
project will use modern modular production techniques.

'We will now work with industry to finalise the programme budget; to set a
construction timetable and establish in-service dates; to ratify how the ships
will be supported through a service life of up to 50 years; and to ensure that
our detailed requirements are met.  Together with the parallel design work, this
means that when we come to commit to the manufacture of the project we can do so
with the highest degree of confidence and certainty in our plans.'

'Alongside this, I am announcing our intention of asking the alliance to put
forward one integrated plan: not only to maintain the new carriers but to look
after the existing carriers until they go out of service. By getting the same
people to commit to maintain the existing carriers until the new ones are ready
to go we will ensure there is a continuity of capability for the Royal Navy.

'This project is a key to the Defence Industrial Strategy and marks the end to
the 'boom and bust' industrial cycle. The introduction of a managed and steady
work stream will allow industry to plan efficiently and to retain the highly
skilled workforce that has contributed to the fine tradition of shipbuilding in
this country. In addition, this project will sustain and create some 10,000 UK
jobs around the country.'

Notes to Editors
     
1.   The Main Gate approval required before projects move to manufacture has 
     been split into two incremental steps.  Today's announcement marks the 
     movement of the Future Aircraft Carrier (CVF) project through the first 
     step,  from the MoD's assessment phase into the demonstration phase. This 
     next phase of design work will further remove risk from the project and 
     give greater understanding of projected costs which will allow MoD to make 
     its main investment decision in confidence.  At that time, we will announce 
     expected programme costs and in service dates for the ships.

2.   The Demonstration Phase work announced today will finalise the details of
     the CVF Delta design in readiness for manufacture.

3.   Design Delta overall parameters include an estimated displacement of 65,000
     tonnes, 280M length, 70M beam, 9M draught with a complement of 1500 
     (including Joint Force Air Group (JFAG)) and a total airgroup size of about 
     40 (JCA, MASC and Merlin).

4.   Design Delta is an adaptable design that, while fitted with a ski-jump to
     operate short take off and vertical landing aircraft on build, can be 
     altered later in its service life to accommodate catapults and arrestor 
     gear to fly conventional carrier aircraft.  This is future-proofing for a 
     ship with a 50 year life.

5.   Plans for the construction and assembly of the ships in yards owned by
     members of the new expanded Alliance include hull block 4 at BAES Govan, 
     block 3 at BAES Barrow, block 2 at VT Group Portsmouth, and the bow 
     (block 1) and final assembly at Babcock Rosyth, all subject to value for 
     money and cost effectiveness considerations.  This work is some 60% of the 
     overall build. Substantial elements of the remainder of the ship super 
     structure are to be competed for by other shipyards and manufacturing 
     facilities.


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