Southern Water Contract

Costain Group PLC
04 April 2005



Costain Group PLC
('Costain' or the 'Company')



Award of AMP4 contract from Southern Water



Costain is today pleased to announce that it has been awarded a major part of
Southern Water's £1.5 billion five-year quality and environmental capital
investment programme, in a consortium with United Utilities and Montgomery
Watson Harza ('MWH').


The contract, which begins immediately and lasts for five years, is worth
approximately £750 million to the consortium, of which Costain has a 40 per cent
share.  The other partners, United Utilities and MWH have shares of 40 per cent
and 20 per cent respectively.


This gives Costain sustainable earnings and margin levels for five years with
the possibility of being renewed to ten and, in this joint venture gives Costain
the opportunity to totally manage the whole programme within the regulatory
environment.


With this major contract award, and the recently announced preferred bidder
status on United Utilities' five-year water framework contract, in joint venture
with Galliford Try, Costain has secured in excess of 20% of the UKs £16 billion
AMP4 expenditure programme over the next five years.




Commenting on the contracts, Stuart Doughty, Chief Executive, said:


'This is an outstanding achievement by Costain, and has given the Company
guaranteed earnings amounting to 50% of its forward order book for the next five
years, renewable to ten.  To have an earnings stream of this quality and
duration is an extremely strong platform from which to build on existing and new
activity.'



                                                                    4 April 2005


Enquiries:


Costain Group PLC                                            Tel: [phone]

Stuart Doughty, Chief Executive
Charles McCole, Finance Director
Graham Read, Public Relations

College Hill                                                 Tel: [phone]

Mark Garraway
Matthew Gregorowski




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