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Balfour Beatty appointed preferred bidder for £123 million Bassetlaw Grouped Schools Project

Balfour Beatty, the international engineering, construction and services group, announces today that its education PFI concession company, Transform Schools, has been appointed preferred bidder for the 25-year, £123 million Bassetlaw Grouped Schools PFI concession by Nottinghamshire County Council.

The project, which is anticipated to reach financial close in January 2005, will involve five new secondary schools, a new special school and two new leisure centres in Retford, Worksop and Tuxford. It will also create two new centres for post-16 education. Phased completion of the new facilities is scheduled for 2006 and 2007. Balfour Beatty will invest some £8 million of equity in the project.

Commenting on the award, Balfour Beatty Chief Executive, Mike Welton, said: "We are delighted to have been chosen to provide Bassetlaw with new facilities and support Nottinghamshire County Council’s objective of giving pupils and teachers an enhanced environment where learning can flourish. Our objective is to bring the same level of professionalism and services to this task as has been recently recognised in the work we are doing in Stoke and Rotherham."

The key objectives for Nottinghamshire County Council are the replacement of deteriorating and unsuitable accommodation, the improvement of educational attainment and post-16 staying-on rates and improved community facilities.

Construction work will be carried out by a joint venture of Balfour Beatty subsidiaries, Balfour Beatty Construction and Balfour Kilpatrick. Facilities management, to a value in excess of £100 million, will be undertaken by Haden Building Management, another Balfour Beatty subsidiary. This will include maintenance, catering, cleaning and grounds maintenance.

This is Balfour Beatty’s fourth major schools PFI project through Transform Schools, in partnership with its joint investor, Innisfree Ltd. Its projects at Stoke and Rotherham are proceeding very successfully, while financial close on the project for North Lanarkshire Council, for which Transform Schools is preferred bidder, is expected during this year.

In May 2004, Transform Schools won both Best Operational Education Project and the overall top prize of Best Operational Partnership (All Sectors) at the 2004 Public Private Finance Awards. The company won for its 25-year Stoke Schools concession, under which nine new schools were contracted to be built, 98 refurbished and full responsibility taken for maintenance and whole-life care of the whole stock of 122 schools.

In partnership with the local authority and demonstrating the flexibility of Transform Schools’ approach, the scheme has been subsequently varied to include 13 new schools and numerous new extensions. In their summary, the judges for the awards said that they “were highly impressed by the success of this multi-school project, covering the entirety of Stoke’s school estate, and the delivery of continuous improvement to school services”.

Enquiries to:

Tim Sharp
Tel: 020 7216 6884

www.balfourbeatty.com

High resolution photographs are available to the media free of charge at www.newscast.co.uk (+44 (0)20 7608 1000).

Notes to Editors

1. In addition to Stoke, Balfour Beatty’s other schools PFI projects are:
   • for the Metropolitan Borough of Rotherham (10 new schools and five refurbished schools plus energy management, repairs and maintenance, caretaking, cleaning and catering – in a 30-year concession worth £100 million in construction and £40 million in long-term services)

   • for North Lanarkshire Council (24 new schools in a 30-year concession worth £140 million in construction and up to £100 million in long-term services - preferred bidder).

2. Balfour Beatty was recently awarded all design and construction work for schools in East Lothian in a contract worth some £40 million under the PPP concession for that council.

3. Balfour Beatty is providing all design and build services for Babcock and Brown in its schools PFI projects. Work secured under this arrangement to date exceeds £80 million, including the construction of five new schools in Calderdale, West Yorkshire.

4. Balfour Beatty is a world-class engineering, construction and services group, well positioned in infrastructure markets which offer significant growth potential. Its partnerships with public and private customers generate secure, long-term income. Its financial position, with significant net cash and with strong operating cash flows, offers continuing flexibility to add additional capacity and expertise to the business mix and to make appropriate investments in PPP/PFI and other long-term growth opportunities.