PFI Healthcare Scheme

Kier Group PLC
15 August 2000


 THIRD MAJOR PFI HEALTHCARE SCHEME FOR KIER VALUED AT £180M

Kier  Group plc, the international construction and services
company,  announces that Prospect Healthcare,  a  consortium
comprising  Kier  and equity investor Innisfree  Ltd,  (each
50%)  has  been named as preferred bidder by West  Berkshire
Priority  Care  Service  NHS Trust to  provide  a  new  £25m
hospital  for  Reading.  The Prospect Healthcare  consortium
will build and run the non-clinical services of the hospital
over  a  30  year  concessionary period in a  project  worth
£180m.   This  represents Kier's third major PFI  healthcare
contract.

Kier's  major projects arm, Kier Build, is to construct  the
new hospital.  Situated at Prospect Park in Reading, the new
hospital  will cater for people with mental health problems.
Work is due to begin on site later this year with completion
scheduled for 2002.

The new hospital will provide 203 beds for a range of acute,
intensive  care,  rehabilitation  and  long-term  needs  for
mental health patients.

Kier Group chairman Colin Busby commented:  'I was delighted
to learn that our consortium is preferred bidder for the new
hospital.  As Kier's third major PFI healthcare project,  it
further  consolidates  our  position  as  a  leader  in  the
provision of PFI healthcare and confirms my belief  in  this
method  of  procurement as the best way  of  delivering  and
upgrading  vital services for the community.   Kier's  first
and  largest  PFI healthcare project, Hairmyres Hospital  in
Scotland,  is running six months ahead of programme.   I  am
pleased  to say that the people behind this success will  be
teaming  up again on this latest project and we look forward
to  working  with the Trust to successfully deliver  a  much
needed facility for Reading.'

This  represents  the third major PFI health  scheme  to  be
awarded  to  a Kier consortium following awards in  Scotland
and Wales.  The company, also in partnership with Innisfree,
is  building Scotland's first PFI hospital in East Kilbride,
a  £67m 440 bed facility, which is due for completion  this
December,  six  months ahead of schedule.   The  concession,
signed in April 1998, has a projected value of £644m and  an
initial period of 30 years.  The first Welsh PFI hospital at
Baglan  Moor  is also being delivered by a Kier  consortium.
The   project  there  is  worth  £432m  over  a   27   year
concessionary period and Caxton FM, Kier Group's  facilities
management  arm, is providing non-clinical support  services
under a £160m contract.


Enquiries:

Colin Busby /Duncan Brand          Jerry Wood
Kier Group plc                     Bell Pottinger Financial
Tel: [phone]                  Tel: [phone]