Contract Update

TEG Group (The) PLC
09 January 2008



Immediate release                                                9 January 2008


                            The TEG GROUP PLC (TEG)
                            ('TEG' or 'the Company')

                         Greater Manchester PFI Update

               TEG Secures Order, Work on TEG Projects Commences


Further to the progress reported in November by Greater Manchester Waste
Disposal Authority ('GMWDA') towards a financial close for its PFI contract, an
Advanced Works Order has been agreed between the Authority and preferred bidder
Viridor-Laing. The TEG Group PLC, the AIM-listed cutting edge green technology
company, which converts organic wastes into natural organic fertiliser, confirms
it has secured a corresponding Advanced Works Order ('the Order') from its
customer Costain, the company retained by the Viridor-Laing consortium to manage
the construction projects for the PFI Contract.


The purpose of the Order is to allow TEG to undertake the detailed design work
necessary for the TEG Silo Cage plants to be constructed under the PFI contract,
prior to the procurement phase of the installation projects. The Order has been
placed now as part of a commercial contract process to prevent further delays to
the installation programmes. Work will now proceed to schedule in advance of
Financial Close, which is projected to be in March 2008, as announced by TEG in
November 2007.


The Order is for £525,000 and covers work already completed by TEG in December
2007 together with work to be undertaken in the first quarter of 2008. The Order
covers the detailed design work for the plants to be constructed by TEG and site
construction of the first plant is scheduled to commence in April 2008.


The Order will form part of the PFI contract to be awarded in March 2008 under
the Financial Close process. TEG expects the overall value of that contract to
be approximately £35m and does not anticipate any change to its scope of supply.


Commenting for TEG, Chief Executive Mick Fishwick said:

'The conclusion of the Advanced Works Order is a very significant step forward
in the development of the Greater Manchester PFI contracts and it allows us to
proceed to the revised schedule. '


'It shows the commitment all parties have in ensuring the PFI process is
completed and in ensuring there is no undue delay in bringing key facilities on
line in time to meet GMWDA's recycling obligations.'


ENDS


Contact:


The TEG Group Plc                        Tel: [phone]

Michael Fishwick, Chief Executive


Adventis Financial PR                    Tel: [phone]

Tarquin Edwards                               07879 458 364


Canaccord Adams (Nomad)                  Tel : [phone]

Chris Bowman


Editor's Notes:


Greater Manchester Waste PFI Contract

On 29 January 2007, TEG announced that it is a principal sub-contractor to the
Viridor-Laing consortium that has been awarded preferred bidder status for the
Greater Manchester Waste PFI contract. TEG is the exclusive supplier of In
Vessel Composting ('IVC') technology to the consortium and following financial
closure, TEG will receive an order to supply all the IVC capacity in the Greater
Manchester region.


TEG is expected to build four plants as part of the consortium, over the period
from 2007 to 2011 with a combined capacity of 175,000 tonnes per annum,
producing 125,000 tonnes of compost product per annum. The plants will all
process green waste and kitchen waste collected from households in the Greater
Manchester region.


TEG

TEG provides an in-vessel composting technology, which is one of the few
approved technologies capable of treating animal by-product (ABP) waste. Plant
economics are predominantly driven by the gate fees charged, rather than the
value of the end product (compost). The TEG process is an economic alternative
to landfill.


The Silo Cage system, one of the few technologies in Europe capable of treating
this waste, is a natural process producing compost as an end product, used as an
excellent soil conditioner that fertilises, retains moisture, provides structure
and reduces the incidence of plant disease. TEG's Silo-Cages are housed in
self-contained buildings, are not unsightly and are environmentally friendly.


Customers include local authorities, waste management companies, food
processors, farmers and landowners. The Company's expanding market is driven by
increasingly stringent EU and UK legislation regulating the treatment and
disposal of organic waste. Statutory targets for the diversion of waste from
landfill increase annually through to 2020, increasing TEG's market opportunity
year on year. The Waste Resource Action Programme estimates that 450 composting
plants will be needed by 2020 to satisfy local authority requirements alone, and
there is increasing demand from the private sector driven by ABP legislation.


NOFCO is a marketing company specialising in the development of end markets for
compost products, an important aspect of all plant developments and key to local
authority development. The company has an expertise in the development of
agricultural and horticultural markets and this capability is to be provided to
customers to enhance TEG's overall service offering.



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