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Balfour Beatty and the World Commission on Dams

Balfour Beatty has welcomed the report produced by the World Commission on Dams (WCD) and declared its support for the efforts of the WCD to establish a framework for promoting appropriate practice in the development and execution of hydro-electric schemes. It has also committed itself to taking the WCD principles, criteria and guidelines into account in determining whether and how it should be involved in any future hydro-electric projects.

The WCD guidelines are still the subject of widescale debate and evaluation amongst governments, development banks and other interested parties. In common with these other stakeholders, Balfour Beatty is evaluating the wider implications of the guidelines. The WCD guidelines are not intended to be used as conditionalities. They outline a generic approach to be used, adapted and incorporated in a manner that best meets local circumstances and developmental needs. The Company has, therefore, advised shareholders to vote against the Friends of the Earth Resolution.

The Friends of the Earth Resolution makes mention of Balfour Beatty's application for ECGD support in conjunction with the proposed Ilisu Dam in Turkey.

It is expected that the Environmental Impact Assessment Report, prepared by a team of independent international experts in respect of the Ilisu Dam project, will shortly be completed, at which time Balfour Beatty will publish the Executive Summary. The full report will also be made publicly available in CD-ROM form at a nominal charge. This report represents many months of intensive investigation, dating back to 1997, and has been financed by the Swiss-led construction consortium of which Balfour Beatty is a member. The Environmental Procedures and Guidelines of the Ex-Im Bank of the United States and OECD Good Practices for Environmental Impact Assessment of Development Projects have been used as the main reference for the study.

The report will identify and detail the principal environmental and social challenges associated with the project and recommend appropriate action on the part of the dam's promoters, the General Directorate of State Hydraulic Works, and of other Turkish authorities.

The publication of this report will offer, for the first time, the proper opportunity for consultation and comment from interested parties, as is appropriate for a project of this size and complexity. Together with the response of the Turkish authorities to the report's recommendations, the report will, in due course, form the basis for the decisions of the Export Credit Agencies potentially involved in underwriting finance for the project and of the other parties with an interest in the project.

ENDS

Enquiries to:
Tim Sharp
Tel: 020 7216 6884
www.balfourbeatty.com/aboutus

Notes to Editors

1. Balfour Beatty respects the concerns, priorities and opinions of a wide variety of stakeholders and recognises that they must be considered in respect of the Company's policies and practices.

2. Balfour Beatty acknowledges the responsibility it has to a large range of stakeholders, including NGOs and development practitioners, and seeks always to develop its practices in a manner that is socially and environmentally responsible.

3. At the recent national 'Quality in Construction' Awards, Balfour Beatty's environmental practices were recognised and Balfour Beatty was awarded the Environmental Achievement Award. In coming to their decision, the judges commented on Balfour Beatty's environment management system which 'has helped the company achieve remarkably high levels of environmental protection'.