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Balfour Beatty completes acquisition of Exeter International Airport for £60 million

Balfour Beatty, the international engineering, construction and services group, announces today that Regional and City Airports (RCA), its specialist airport investment and development group, has completed the acquisition of Exeter and Devon International Airport Ltd, which owns Exeter International Airport, for a consideration of £60 million.

The acquisition is being financed through £31 million of equity, with Balfour Beatty as the lead investor. The remainder of the consideration will be satisfied by limited recourse borrowings, with HSBC as financial adviser and lead arranger. London City Airport, through a technical services agreement, will be Balfour Beatty’s operational partner at the airport.

Commenting today, Balfour Beatty Chief Executive, Ian Tyler, said:

“Exeter International Airport is one of the fastest-growing regional airports in the UK and it is anticipated it will handle over a million passengers in 2006/2007. We anticipate further strong growth in passenger numbers and have a clear operational and development plan for the airport over the long term, which takes our growth forecasts fully into account. Our vision for Exeter International Airport is that it should become the airport of choice for the region.”

Exeter International Airport is positioned within a strong local economy with a high propensity to fly and has significant opportunities to increase both its share of the regional market and the use of the airport by the population in the surrounding area. The airport will be substantially redeveloped with new terminal facilities, new aircraft stands and, in the longer term, further terminal capacity, stand and taxiway development.

It is anticipated that a new departures building will be constructed by 2010. The initial development phase will also include improvements to the airport’s surface access, stand and apron enhancements and an increase in car parking capacity. In the longer term, further terminal and ancillary facilities expansion is envisaged to be carried out over three phases.

Balfour Beatty Capital is an experienced investor, having raised over £7 billion of funding for its 23 privately-financed UK infrastructure projects in which it has over £300 million of committed equity. Balfour Beatty also has a successful track record in airport infrastructure development. Its professional and technical services division has played a key role in the development programmes at Heathrow, Gatwick and the BAA Scottish Airports. Its construction and services subsidiaries have undertaken major airport projects at Heathrow, Gatwick, Stansted, Glasgow, Edinburgh, Hong Kong, Dubai and Miami.

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CONNECT M1-A1

At the end of December 2006, Infrastructure Investors LP (I²) became 50% investors in Connect M1-A1 (in which Balfour Beatty also has a 50% interest), having acquired Macquarie’s investment. Balfour Beatty acted as an intermediary through exercising its pre-emption right over Macquarie’s interest and selling it on to I² at the pre-emption price of £44 million. The gross assets involved in the transaction were £147 million at 31 March 2006, and net profits for the year to that date attributable to those assets was £4 million. Balfour Beatty’s interest in Connect M1-A1 remains at 50%.

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Notes to Editors

1. Balfour Beatty has a substantial existing investment portfolio, largely through the UK PPP/PFI programme. This portfolio consists of:-
• seven major hospitals
• six major schools schemes
• five road and two street lighting projects
• two concessions under the London Underground PPP
• a waste water scheme
• Barking Power Station (non-PPP)
• Devonport Dockyard (non-PPP).
2. Balfour Beatty Capital develops, owns and operates privately-financed infrastructure projects. It is one of the largest UK private sector infrastructure investors and has a broad range of skills from project promotion and development through to financing, project execution and long-term asset management and operations.
3. 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.