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Centex Construction awarded $500 million military housing contract for US Department of the Navy

Balfour Beatty, the international engineering, construction, services and investment group, announces today that Centex Construction, the leading US builder which it agreed to acquire on 1 February 2007, has been awarded a $525 million contract for the US Navy South-East privatised housing project.

The contract, won with its long-term partners, GMH, a leading US concession company in the field of privatised military and student housing projects, is for accommodation at 11 Navy bases in five states and involves some 2,100 individual housing units, community centres and additional amenity features.

Commenting today on the contract award, Balfour Beatty Chief Executive, Ian Tyler, said:

“This latest addition to Centex’s extensive military housing order book further consolidates their leading position in this market and demonstrates the confidence that the US market has in Centex under Balfour Beatty’s ownership.

“Centex Construction is a high-quality building company which will give us critical mass in the US in a core Balfour Beatty business and brings substantial new business development opportunities.”

This is one of the largest military housing schemes let to date and is Centex’s eleventh such scheme. Construction work will commence in November 2007 and is due for completion by December 2012. Work will be undertaken at naval bases in South Carolina, Georgia, Florida, Mississippi and Texas.

The award takes Centex’s military housing order book to over $1.2 billion.

Centex Construction (CC) is a profitable, top tier US building company with leading positions in the Florida, Texas, Washington DC and North Carolina markets. CC is also a leading player in the nationwide military housing market. It has approximately 1,500 employees. The CC management team to be acquired with the business has a proven track record of profitable growth. Following the completion of the acquisition, which is expected by the end of March, the business will become Balfour Beatty Construction Inc.

Balfour Beatty is already a US leader in selected design, project and programme management markets through Heery International and has established a presence in the Group’s US private finance market through Balfour Beatty Capital. The acquisition, which is expected to be completed by the end of March, offers Balfour Beatty additional potential to grow as well as a strong, well positioned, well managed business.

ENDS

Enquiries to:

Tim Sharp
Tel: 020 7216 6884
www.balfourbeatty.com

Notes to Editors:

1. Once the acquisition of Centex Construction is completed, Balfour Beatty’s annual revenues in the US will amount to approximately $3.5 billion, 80% of which will be in the building sector. US sales will represent approximately 23% of proforma Group revenues.


2. CC's business is in the construction management and delivery of institutional and commercial buildings, particularly in the education, healthcare, correctional, government, transportation, leisure and office sectors. Amongst its major customers are Federal Government, Disney Corporation, Boston Properties, Marriott, Bank of America and a range of education authorities and healthcare organisations.


3. Balfour Beatty is a world-class engineering, construction, services and investment business, well positioned in infrastructure markets which offer significant long-term growth. We work in partnership with sophisticated customers who value the highest levels of quality, safety and technical expertise. Our skills are applied in appropriate combinations to meet individual customer need. 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.