Re Contract

TEG Group (The) PLC
27 November 2007



For release                         12:00                      27 November 2007





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


                    Greater Manchester PFI Financial Closure
                                     Update


Further to the announcement made by the Greater Manchester Waste Disposal
Authority ('GMWDA') on 23 November 2007 (www.gmwda.gov.uk) of the projected
completion of Financial Close for the Greater Manchester Waste PFI contract
('PFI Contract') at the end of March 2008, the TEG Group Plc, the AIM-listed
cutting edge green technology company, which converts organic wastes into
natural organic fertiliser, confirms it expects a corresponding delay in the
final conclusion of its contracts with its customer Costain Limited ('Costain'),
the company retained by the Viridor/Laing consortium to manage the construction
projects for the PFI Contract.


Nevertheless, TEG still expects the overall contract value to be approximately
£35m, does not anticipate any change to its scope of supply and does not
anticipate that the delay in reaching Financial Close will significantly impact
further on TEG build programmes.


TEG still anticipates an interim order during the final quarter of 2007 for
construction of the first of its four plants, at Waithlands in Rochdale, as it
expects the plant will still be constructed in 2008. In agreement with Costain,
TEG has commenced detailed design work in November in order to enable the
planned completion of this programme to be kept on track. TEG anticipates small
revenues from the interim order in 2007 but, as previously announced, under IFRS
accounting standards it is unlikely that the construction programmes will be
sufficiently advanced for TEG to be able to recognise profits against the
revenues in its 2007 accounts.




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 2010 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.




                      This information is provided by RNS
            The company news service from the London Stock Exchange