Carillion Plc Regulatory News (CLLN)

24 July 2014

Carillion joint venture signs contracts with the Defence Infrastructure Organisation for a further three Next Generation Estate Contracts potentially worth up to £2.8 billion including additional services and extensions.

These three contracts form the final part of the Defence Infrastructure Organisation's (DIO) Next Generation Estate Contracts (NGEC) programme to maintain and upgrade defence infrastructure. This announcement completes the NGEC facilities management contract awards programme and follows the announcement on 12 May 2014 that Carillion and Amey joint ventures had won the National Housing Prime contract and the Scotland and Northern Ireland Regional Prime contract. The five NGECs won by the Carillion and Amey joint ventures have a total potential value of £4.5 billion.

A Carillion joint venture with Amey has been awarded the Regional Prime Central contract that is estimated by MoD to be worth in the order of £435 million over the initial contract period of five years, which can be extended by a further five years, subject to approval. This enlarged contract replaces the existing Regional Prime Contract Central, which is currently held by a Carillion joint venture with Amey and covers central and northern England and the whole of Wales, and the existing Regional Prime Contract East, as services in all these areas are being combined into one contract.

Under this contract, the joint venture will provide a wide range of hard facilities and asset management services at more than 150 establishments containing more than 14,000 assets at sites including RAF Cranwell, Catterick Garrison, RAF Valley and MoD Stafford, together with the option to undertake capital works projects valued up to £3.93 million. Hard facilities management services will include planned and reactive building fabric and mechanical and electrical engineering maintenance and utility efficiency services.

The Carillion joint venture has also been awarded the South East and South West Regional Prime contracts that are estimated by MoD to be worth in the order of £258 million and £265 million, respectively, over the initial contract period of five years.

The South East contract will provide hard facilities and asset management services at 60 key sites, including Sandhurst, Horse Guards, HQ Land Andover and RAF Northolt.

The South West contract will provide hard facilities and asset management services at 40 key sites, including RNAS Yeovilton, DE&S Abbey Wood, RAF Lyneham and Britannia Naval College. At DE&S Abbey Wood and the UK Hydrographic Office, the joint venture will provide a Total Facilities Management service, including catering, cleaning and other soft facilities management services in addition to hard services, which will be delivered by an in-house Carillion Amey team.

All three contracts, together with the contract in Scotland and Northern Ireland, which was announced on 12 May, will deploy a service delivery model for hard facilities management services that will support the UK Government's objective of encouraging the use of Small and Medium-sized Enterprises.

Both Carillion and Amey will also use these new contracts to create further opportunities to demonstrate their commitment to the Armed Forces Corporate Covenant, which helps ex-service personnel find employment and supports the provision of Reservists.

Carillion Chief Executive, Richard Howson, said: "We are delighted that our joint ventures have signed these three major contracts. This follows our recent success in winning the National Housing Prime contract and the Scotland and Northern Ireland Regional Prime contract and means that our joint ventures have won all five of the Next Generation Estate contracts for which we bid. We look forward to building on the strong relationship we have developed with Defence Infrastructure Organisation and to working closely with DIO to deliver further improvements to the quality and energy efficiency of the Defence estate across the whole of the UK.

"DIO set industry the challenge of providing added value to the military estate and by awarding us these five contracts providing UK wide coverage the offers we submitted have been recognised as generating demonstrable benefits in this regard, including the use of market leading customer feedback systems."

Notes to Editors

Carillion is a leading integrated support services company with a substantial portfolio of Public Private Partnership projects and extensive construction capabilities. The Group had annual revenue in 2013 of some £4.1 billion, employs around 40,000 people and operates across the UK, in the Middle East and Canada.

The Group has four business segments.

Support services - this includes facilities management, facilities services, energy services, utility services, road maintenance, rail services and consultancy services.

Public Private Partnership (PPP) projects - this includes investing activities in PPP projects for Government buildings and infrastructure, mainly in the Defence, Health, Education, Transport and Secure accommodation sectors.

Middle East construction services - this includes building and civil engineering activities in the Middle East.

Construction services (excluding the Middle East) - this includes building, civil engineering and developments activities in the UK and construction activities in Canada.

This and other Carillion news releases can be found at www.carillionplc.com

For more information

John Denning, Director Group Corporate Affairs, Carillion plc + 44 (0) 1902 316426

Finsbury

James Murgatroyd or Gordon Simpson +44 (0) 207 2513801

DIO

The Defence Infrastructure Organisation (DIO) plays a vital role in supporting the UK's Armed Forces by building, maintaining and servicing what the men and women who serve our country need to live, work, train and deploy on operations.

DIO is part of the Ministry of Defence (MOD). It is responsible for managing and maintaining land and properties, as well as providing related support services, to meet the current and future needs of the MOD and personnel at home and abroad, and to support current operations.

Its work includes supporting operational units by providing and improving single living and service family accommodation; training areas and historic military sites. DIO actively manages these to ensure the needs of Defence are met, value for money is achieved, and its heritage is protected, as well as achieving its environmental goals.