Alcaidesa Planning Permission

Costain Group PLC
10 December 2003


                                        
                                COSTAIN GROUP PLC
                                  ('Costain')
                                        
                      Alcaidesa Phase 3 Planning Permission

Costain is pleased to announce that Alcaidesa Holding SA (a Spanish registered
company in which Costain holds a 50% interest) ('Alcaidesa') has been advised by
the local planning authority - The Municipal Authority of La Linea de la
Concepcion - that approval has been given to Alcaidesa's Masterplan proposals
for La Linea 2, which is the third phase of Alcaidesa's residential and leisure
development on the Costa del Sol.

This third phase of the development is set in a 100 hectare land enclave with
views over the Mediterranean Sea and the Rock of Gibraltar. The Masterplan
approval will permit the construction of 1,200 residential homes, some
commercial facilities and part of the second golf course. The permission will
enable Alcaidesa to complete land sales to Spanish developers of 880 building
plots that were, until now, conditional only upon Masterplan approval. A further
320 building plots will be developed by Alcaidesa in 2005/6 once the full
infrastructure is completed. The infrastructure work will start early in 2004
with completion in late summer 2004.

Alcaidesa is continuing its infrastructure work in the second phase of the
development known as San Roque 1 and 2. This is due for completion in summer
2004, after which further development of the site will commence, including the
first phase of a 400 unit apartment scheme to be built over a three to four
years by Alcaidesa in joint venture with major Spanish developer Ros & Falcon.

Alcaidesa is now considering proposals for a fourth phase of development on land
it already owns nearby.

                                                                10 December 2003

ENQUIRIES:

Costain Group PLC                                 Tel: [phone]
Stuart Doughty, Chief Executive
Graham Read, Public Relations

College Hill                                      Tel: [phone]
Mark Garraway
Matthew Gregorowski


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