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Balfour Beatty remains confident on PFI despite banking crisis

Britain's biggest contractor Balfour Beatty said today that it expected to 'make progress' in 2009 despite the economic crisis, and would reach financial close on four PFI projects in the first half of the year.

The firm is currently waiting on financial close for the £5bn M25 widening deal which will unlock significant work throughout the roads sector.

Balfour Beatty set out its view on the year ahead in a trading update for the year ended 31 December 2008 in advance of its preliminary results announcement on 5 March 2009.

It said trading overall was in line with its interim management statement on 4 November, when it indicated that it expected 2008 to be a year of strong progress.

The firm's financial position remain strong, with average net cash for the second half of the year being circa £250M.

At the year end its confirmed order book increased from the £12.1bn reported at the half year, with further significant prospects likely to be secured in 2009.

The UK civil engineering businesses delivered good results, with a substantial forward order book.

In rail there was steady progress, particularly due to its international high-speed rail electrification and power supply business, now strengthened by the acquisition of Schreck-Mieves in Germany, which is performing as expected, and the award of the contract to design, build and commission the railway systems in the Gotthard Tunnel in Switzerland.

"We have benefited in 2008 from continued growth in infrastructure expenditure, particularly in education and healthcare, and finish the year with a strong order book. As a result, despite the difficult economic environment, we anticipate making progress in 2009," it said.

"We anticipate reaching financial close on our four preferred bidder PFI projects in the UK in the first half of 2009, despite the challenges presented by current financing markets."

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