Re Contract

Balfour Beatty PLC
19 January 2001


BALFOUR BEATTY RAIL AND RAILTRACK MAINTENANCE CONTRACTS
=======================================================

Following the decisions announced today by Railtrack in respect of the new IMC
2000 maintenance contracts, Balfour Beatty Rail Maintenance will be operating
in three areas under contract to Railtrack.  The total annual value of these
contracts, which are for Wessex, Kent, and Anglia & Great Eastern, is likely
to be in the region of £125 million.

Balfour Beatty is the incumbent maintenance contractor in the Kent and Anglia
& Great Eastern Areas.  The new contracts for these areas will take effect
from 1 April 2001 and will operate under the new IMC 2000 contract form based
on target cost.  They replace fixed price RT1A contracts and more closely
align the financial and operational interests of client and contractor.  The
five-year contracts for Kent and Anglia run from 1 April 2001.  The Wessex
Area contract was won through competitive tender in October 1999 as an IMC 2
contract.  Discussions are currently under way with Railtrack with a view to
bringing the Wessex contract more closely into line with the IMC 2000 format.

Over a substantial proportion of these contract areas, Balfour Beatty also has
a prime responsibility for rail renewals (through Balfour Beatty Rail
Renewals), an arrangement which offers significant opportunity for efficiency
improvements and the co-ordination of works.

Under the new contractual arrangements and with the programme management of
maintenance and renewals increasingly integrated, there is an opportunity for
Balfour Beatty to begin the process of improving its margins in rail
maintenance, which have declined during the final period of the RT1a contracts
put in place at the time of privatisation.

Following the recent acquisition of the Rail Power Systems business of
Adtranz, Balfour Beatty Rail's annual rail turnover will be in excess of £650
million.  These UK rail maintenance contracts will, therefore, represent
approximately 20% of Balfour Beatty's international rail engineering and
services business.  The principal activities in Balfour Beatty Rail are in:

     major rail infrastructure development projects;
     high-speed rail electrification and power supply projects;
     major trackwork projects;
     rail renewals;
     maintenance;
     the manufacture of switches and crossings; and
     the supply of specialist rail plant and equipment.

Ambitious plans for developing and improving the UK rail infrastructure over
the next 10 years were announced during 2000.  We look forward to continuing
to support Railtrack in improving the quality and efficiency of the UK's rail
infrastructure.

The worldwide market for rail engineering and services is growing under the
influence of rapid traffic growth, the development of mass transit systems,
rail utility restructuring and increased investment from the private sector.
It is Balfour Beatty's intent to build further on its position as a leader in
fixed rail infrastructure around the world.


Enquiries to:
Tim Sharp
Tel: [phone]


Notes to Editors
----------------

1.   In March 2000, Balfour Beatty acquired the US trackwork specialists,
Marta Track Constructors Inc and Metroplex Corporation, for an initial
consideration of $50 million.  This provides the group with a substantial
presence in the large and growing US rail market.

2.   In October 2000, Balfour Beatty acquired the fixed equipment business of
Adtranz, which is working on a wide range of rail projects around the world
including the Euros 100 million Harbin-Dalian Line in China, the
Euros 90 million Nurnberg to Ingolstadt Line in Germany, the Euros 40 million
Madrid to Barcelona high-speed line in Spain, a Euros 22 million project in
Sao Paulo in Brazil and a Euros 20 million project on the Sunderland Metro in
the UK.

3.   Balfour Beatty Rail is currently working on a number of major UK rail
projects including the remodelling of the infrastructure on the approaches to
Euston Station, the electrification of the West Coast Main Line, the
remodelling of the approaches to Leeds station and a key contract on the
Channel Tunnel Rail Link.

4.   The company's activities in the USA include major projects, in their
early stages, for the BART San Francisco Airport Extension, the Alameda
Corridor project in Los Angeles and the Southern New Jersey Light Rail System.
The group has recently completed the $500 million high-speed rail
electrification of the line from Boston to New Haven in the USA for Amtrak.