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Balfour Beatty reaches financial close on £140 million North Lanarkshire schools PPP project

The 31-year concession involves the construction of 21 new schools, including three large secondary schools in Airdrie and Coatbridge, six primary schools and a further 12 primary schools provided over six joint campus facilities. Also, there is a potential for a further three schools to be constructed.

Commenting on today’s announcement, Balfour Beatty Chief Executive, Ian Tyler, said:

“We are delighted to be working in partnership with North Lanarkshire Council in realising its objective to provide the very best education opportunities for the area. Balfour Beatty will provide the Council with a greatly enhanced education environment through the design, construction and servicing of new, modern, state-of-the-art buildings and facilities. We intend to bring the same level of professionalism and service as we are providing through our public-private partnerships in Stoke and Rotherham schools.”

North Lanarkshire Council Leader, Councillor Jim McCabe, said:

“I am pleased to report that after a lot of hard work behind the scenes by the Council and Transform Schools, we are a step closer to providing brand new schools and community facilities for the people of North Lanarkshire.”

Balfour Beatty will invest £8 million of equity in the project. Balfour Beatty Capital Projects and its joint venture partner, Innisfree Limited, have established Transform Schools (North Lanarkshire) Ltd as the concession company. This is the highest value concession contract awarded to Transform Schools, which now has responsibility for providing services to over 150 schools in England and Scotland.

Construction work by a joint venture of Balfour Beatty subsidiary companies, Balfour Beatty Construction and Balfour Kilpatrick, began under an advance works contract in October 2004. Completed schools will be handed over between January 2006 and October 2008. Facilities management for a range of hard and soft services will be provided by Haden Building Management, Balfour Beatty’s building management and building maintenance arm.

Balfour Beatty is preferred bidder on two further schools PPP projects, in Nottinghamshire and Birmingham, which are expected to reach financial close during 2005.

Enquiries to:

Tim Sharp
Tel: 020 7216 6884

www.balfourbeatty.com

Notes to Editors

1. 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, sustainable 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 and other long-term growth opportunities.

2. Balfour Beatty recently announced the completion and delivery of two ground-breaking PFI projects, with a combined value of £357 million. The M77/Glasgow Southern Orbital road scheme and Phase One of the University College London Hospital projects were both completed on budget and on time.
   • The £132 million M77 extension and Glasgow Southern Orbital road is the biggest ever single road project in Scotland and was completed and opened to traffic in only 24 months. The new roads will significantly reduce journey times between Glasgow and Ayrshire and replace an existing accident blackspot, the A77.

     Connect, a wholly-owned subsidiary of Balfour Beatty, will now maintain and operate the road on behalf of the clients, the Scottish Executive, East Renfrewshire Council and South Lanarkshire Council, for a concession period of 32 years.

   • Balfour Beatty, as a key partner in the Health Management (UCLH) joint venture, also handed over a new teaching hospital for the University College London Hospitals Trust in April, on budget and on time.

     Balfour Beatty was responsible for the £225 million project to design and build a new teaching hospital, under the Government’s private finance initiative.

     The first phase of the project involved designing and building an 18-storey, 669-bed hospital which will house facilities, including accident and emergency, day-care and wards, from the existing UCLH and Middlesex Hospitals.