Balfour Beatty Appointed Preferred Bidder For [pounds sterling]190 Million Northern Hospitals PFI Projects.

Balfour Beatty, the international engineering, construction and services group, announces today that its specialist healthcare concession company, Consort Healthcare, has been appointed preferred bidder for the [pounds sterling]190 million Northern Batched Hospitals project in Greater Manchester. The project comprises two hospital development schemes. In Salford, Consort will redevelop and provide new buildings for Hope Hospital under a 34-year PFI concession contract with a capital value of [pounds sterling]130 million. In Tameside, Consort will design and build a new acute and mental health facility at Tameside General Hospital under a concession contract worth [pounds sterling]60 million. It is anticipated that financial close for the schemes will be achieved in early 2007. Commenting on the award today, Balfour Beatty Chief Executive, Ian Tyler, said: "We are delighted to have been selected to create first-class healthcare facilities for the people of Salford and Tameside and for the staff in the facilities which serve them. These will be our seventh and eighth major PFI hospital schemes. We have proven skills and a first-class track record in this specialist area and are now a clear leader in the field." In Salford, a number of new buildings will be constructed, including an education centre, an emergency department extension, an assessment unit, a critical care unit, a heart care unit, an intestinal failure unit, new renal and urology units and residential accommodation for hospital staff. In Tameside, a number of new buildings will be constructed, including a new mental health unit for the elderly, a ward block, a day surgery and an endoscopy unit and extensions to theatres, radiology, diagnostic and treatment centres. Balfour Beatty now has eight major PFI hospital schemes. New hospitals in Edinburgh, Durham and at University College London (UCLH) are now operational. UCLH Phase I was officially opened by Her Majesty The Queen on Thursday 20 October. The new Blackburn Hospital is due to open in the summer of 2006. Financial close on the new [pounds sterling]521 million Birmingham Hospital is expected in the near future. A revised plan for the [pounds sterling]250 million scheme at Pinderfields in Yorkshire was recently approved, with financial close anticipated during 2006. In total, the eight schemes represent Balfour Beatty equity investment of some [pounds sterling]90 million. Earlier this year, Balfour Beatty Construction was appointed preferred bidder, through concession company, Canmore, for the construction work on the [pounds sterling]160 million project to create two new Ambulatory Care and Diagnostic Centres at Stobhill Hospital and Victoria Infirmary in Glasgow. Footnotes Consort Healthcare is a committed and experienced provider of serviced healthcare accommodation under the UK Private Finance Initiative. It delivers and maintains healthcare assets, principally through the use of Balfour Beatty Group companies: Balfour Beatty Construction - construction planning and execution Haden Young and Balfour Kilpatrick - electrical and mechanical services Haden Building Management - support services and facilities management.

Balfour Beatty's approach to PFI healthcare projects provides: continuity and efficiency through all phases of the project rapid progress on financial arrangements competitively priced bids long-term commitment strength and depth of expertise from one source.

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.

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Balfour Beatty

130 Wilton Road

London

SW1V 1LQ

UNITED KINGDOM

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