AMY Amey

RNS Number:6925F
Jarvis PLC
02 January 2003

For Immediate Release                                        31st December 2002

                                 JARVIS PLC

                    COMPLETION OF LONDON UNDERGROUND PPP
                               FOR JNP CONCESSION

Jarvis, the infrastructure services and facilities management group, welcomes
the announcement that financial close has now been reached by Tube Lines
(Holdings) Limited ("TLH"), the consortium company in which Jarvis is a
shareholder, on its contract to modernise the Jubilee, Northern and Piccadilly
Lines.

For over three years TLH has been preparing to take control of Infraco JNP Ltd,
the operating subsidiary of TLH and which has now been renamed Tube Lines
Limited ("Tube Lines"). Tube Lines will work in partnership with London
Underground and will have the responsibility for improving and maintaining 100
stations and 187 miles of track and 250 trains.  Tube Lines will also benefit
from the transfer of some 2,500 employees, the majority of whom were formerly
staff of LUL.

The Chief Executive of Jarvis, Paris Moayedi, commented:  "From the beginning of
2003, Tube Lines will begin to implement much needed enhancements to the
Jubilee, Northern and Piccadilly lines, from new and improved track to better
stations and modern rolling stock.  We at Jarvis are delighted and proud to be
playing such a key role in the long-awaited regeneration of the Tube".

Tube Lines expects to reduce delays by an average of nearly 10% in the first 12
months.  Over the first 7 1/2 years of the project, passengers on the three
lines will see 42 miles of track replaced, 97 stations modernised or refurbished
and 128 escalators refurbished or replaced.  There will be major upgrades to the
Jubilee and Northern lines by 2009 and 2011 respectively, and a major upgrade to
the Piccadilly line in the second 7 1/2 year period. It is expected that this
will result in approximately a 20% increase in capacity over this part of the
Underground network upon completion of the upgrades.The performance of Tube
Lines will be measured principally on the capacity of the system in terms of
numbers of trains, the availability of the infrastructure and the ambience of
the trains and stations.

LUL will remain responsible for the management of the network, the safety regime
and 8,000 employees, including drivers and signalling and station ticketing
staff.  It will also be responsible for ticketing and fares and paying the
annual Infrastructure Service Charge to Tube Lines.

The Government has confirmed that it will not transfer LUL to Transport for
London whilst the period for any appeal against the European Commission's
decision on State Aid is still running or any such appeal is still continuing.
In addition, the Government has provided certain indemnities to the members of
TLH and the debt providers should any such appeal prove successful and the
transaction have to be unwound.

The three partners in TLH are Jarvis, Bechtel and Amey. Under an agreement
announced on 4 December 2002, Jarvis and Bechtel have provided an equity support
plan for Amey's equity interest in the project, and have therefore each
committed up to #90m; this amount will reduce to #60m if Amey accedes to the
project by 30 June 2003. In addition, the consortium has also arranged a total
of #1.8bn of senior debt financing and a further #135m in mezzanine finance, all
of which is non-recourse to the consortium members. Almost all of the investment
will be made in the first 7 1/2 year period.  It is expected that the annual
interest on the whole of this investment will be paid out of the project,
including interest on each consortium member's commitments. Tube Lines will
spend approximately #4.4bn over the first 7 1/2 years of the 30 year project.

The partners will second some 50 senior and experienced personnel to Tube Lines
and will receive secondment fees, with Bechtel having responsibility for the
capital expenditure programme, and Jarvis and Amey being responsible for the
operating expenditure programme.  These arrangements also provide Jarvis with an
opportunity, under a gain-share/pain-share system, to benefit from improvements
to the annual operating expenditure budget. Jarvis is expected to earn gross
revenues in the order of #8m p.a., in the first full year, assuming only a
one-third interest in the project.  In addition, Jarvis is well equipped to bid
for a range of services which Tube Lines will outsource, including track renewal
work, signalling projects and facilities management.

As a member of the consortium, Jarvis will also benefit from the expected
profits of TLH. Jarvis' pre-tax share is expected to be in the region of #8m
p.a. in the first full year, assuming a one third interest in TLH, and to rise
thereafter during the first 7 1/2 year period.  However, it is not expected that
any material dividends will be paid by Tube Lines in this period.

It is anticipated that Jarvis' pre-tax profit in the financial year 2003-04 will
benefit by not less than #14m, taking into account the secondment fees and the
above profit share. Jarvis does not expect the financial close of the Tube Lines
contract to have a material effect on its earnings in the current financial year
to 31 March 2003. However as anticipated, the current financial year will
reflect the cash recovery of the remaining bid costs incurred in securing the
contract.

Jarvis, as part of the Tube Lines consortium, will now begin work on the long
overdue regeneration of this part of the London Underground network. Tube Lines
will be spending #1.6m every day on the maintenance and modernisation of the
three lines, reducing delays, improving cleanliness and starting work on the
upgrading of the tracks and signals. Jarvis is pleased that it can now get on
with meeting the challenge of providing London and Londoners with an underground
rail system of which they can be proud.

Jarvis will make a presentation to analysts at the offices of Dresdner Kleinwort
Wasserstein, 20 Fenchurch Street, London, EC3 at 4.30pm on 7th January 2003.


Further inquiries:

Mike Tate, Director of Corporate Communications
Jarvis plc

Tel:     020 7462 6674
Mob:   07710 583623
E-mail: mike.tate@jarvis-uk.com

Or

David Simpson
Weber Shandwick Square Mile

Mob:   07810 773337
E-mail: dsimpson@webershandwick.com

                      This information is provided by RNS
            The company news service from the London Stock Exchange
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