Signing of MoD Water Contract

Costain Group PLC
16 December 2004



Costain Group PLC

('Costain or the 'Group')


Signing of MoD Water Contract with Severn Trent


Costain, as part of Coast to Coast Water Limited ('C2C'), the consortium with
Severn Trent, is delighted to have signed the contract with the Ministry of
Defence for Package C of Project Aquatrine. Further to the contract award a
Partnering Charter has this week been signed by representatives from the MOD and
C2C at a ceremony in London.

Package C of Project Aquatrine is a 25 year contract which will deliver water
and wastewater services to approximately 1,500 MOD sites throughout the
Southeast, East and North of England and is worth approximately £1 billion in
revenues. Project Aquatrine is the first major Public Private Partnership (PPP)
in the UK water sector to provide services to a diverse and widely dispersed
estate outside of the regulated water industry, and involves the transfer of
responsibility for the maintenance and operation of the MOD's water and
wastewater assets to the private sector.

Stuart Doughty, Chief Executive of Costain, said:

'It is a great pleasure and privilege to sign the Partnering Charter that puts
the seal on the 25 year contract under which C2C will deliver water and
wastewater services to the Ministry of Defence.  The Charter will ensure a
mutually beneficial partnering arrangement that delivers value for money water
services to all Package C customers in a safe and environmentally caring way.'


                                                                16 December 2004

Enquiries:

 Costain Group PLC               01628 842 444   [e-mail]
 Graham Read, Public Relations

 College Hill                    020 7457 2020   [e-mail]
 Matthew Gregorowski






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