Re Contract

Balfour Beatty PLC
10 June 2004

10 June 2004



                  BALFOUR BEATTY APPOINTED PREFERRED BIDDER FOR
        £140 MILLION NORTH LANARKSHIRE SCHOOLS EDUCATION 2010 PPP PROJECT
        =================================================================

        Balfour Beatty's Stoke Schools PFI Project Receives Top Award
                      at 2004 Public Private Finance Awards
                      -------------------------------------

Balfour Beatty plc, the international engineering, construction and services
group, announces today that it has been appointed preferred bidder by North
Lanarkshire Council for its Education 2010 PPP Project. The concession involves
capital works to the value of approximately £140 million and is likely to yield
up to £100 million of long-term service revenue.

The 30-year concession, which is expected to reach financial close in October
2004, involves the construction of 24 new schools, including three large
secondary schools in Airdrie and Coatbridge, seven primary schools and a further
seven joint campus primary schools.

Commenting on today's announcement, Balfour Beatty Chief Executive, Mike Welton,
said: 'We are delighted to be selected by North Lanarkshire Council as partners
in realising their objective to provide the very best for the young people of
the county through new, modern, state-of-the-art buildings which will provide
the right learning environment. It is our objective to bring the same level of
professionalism and service to this task as has been recently recognised in the
work we are doing in Stoke.'

Balfour Beatty will invest some £7 million of equity in the project. Balfour
Beatty Capital Projects and its joint venture partner, Innisfree Limited, will
establish Transform Schools (North Lanarkshire) Ltd as the concession company.

Construction work will begin in autumn 2004 and will be carried out by a joint
venture of Balfour Beatty subsidiary companies, Balfour Beatty Construction and
Balfour Kilpatrick. The first schools will be handed over in December 2005.
Facilities management for a range of hard and soft services will be provided by
Haden Building Management, also a Balfour Beatty company.

Last month, Balfour Beatty's education concession company, Transform Schools,
won both Best Operational Educational Project and the overall top prize of Best
Operational Project (All Sectors) at the 2004 Public Private Finance Awards, the
PPP 'Oscars'. The company won the awards for its 25-year Stoke Schools
concession under which nine new schools are being built, 98 refurbished and full
responsibility taken for maintenance and whole-life care of the complete 122
school stock.

                                      ENDS

Enquiries to:
Tim Sharp
Tel: [phone]
www.balfourbeatty.com


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

1.    Balfour Beatty has two existing schools PPP concessions, in which Balfour
      Beatty Capital Projects, Balfour Beatty Construction, Balfour Kilpatrick
      and Haden Building Management fulfil the same roles as for the North
      Lanarkshire contract.

      - In Stoke, Balfour Beatty is responsible for the largest 'bundled
        refurbishment' scheme ever let in England under the PPP programme. The
        concession covers the entire school stock of 122 schools including
        rebuilding nine schools, refurbishing a further 98 and maintaining all
        122 over the concession period of 25 years, which began in 2000.

      - In Rotherham, Balfour Beatty is designing, building and/or refurbishing
        15 schools and providing hard and soft facilities management services to
        the sites for the concession period of 31 years.

2.    Balfour Beatty was recently awarded all design and construction work for
      schools in East Lothian in a contract worth some £40 million under the PPP
      concession for that council.

3.    Balfour Beatty is providing all design and build services for Babcock and
      Brown in its schools PFI projects. Work secured under this arrangement to
      date exceeds £80 million, including the construction of five new schools
      in Calderdale, West Yorkshire.





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