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Shaw Reaches Agreement to Settle Claims Related to the Pike Project

BATON ROUGE, La.--(BUSINESS WIRE)--Oct. 6, 2003--The Shaw Group Inc. (NYSE:SGR) ("Shaw" or "the Company") announced today that it has agreed upon terms for the settlement of claims related to the cancellation of the LSP-Pike Energy, LLC ("Pike") power plant project in Mississippi. Shaw, through its subsidiary Stone & Webster, Inc., was the engineering, procurement and construction (EPC) contractor on the Pike project which was not completed. The Company has been in litigation with Pike, its parent NRG Energy, Inc. ("NRG"), and NRG's parent, Xcel Energy Inc. ("Xcel"), since October 2002. The litigation will be dismissed as a result of this settlement, which is subject to final bankruptcy court approval.

Although the precise terms were not disclosed, included in the consideration under the proposed settlement Shaw will receive an allowed claim in a fixed amount of $35 million in the pending bankruptcy case of NRG. Shaw will also retain ownership of the materials and equipment to which it asserts title from the Pike project, excluding the turbines, as well as ownership of the project site.

"All of the parties have been working diligently for several weeks to complete a settlement of the ongoing litigation matters related to the Pike project. We have made great strides in reducing our exposure on this project and in improving our relationship with NRG, as well as with Xcel," stated J.M. Bernhard, Jr., Shaw's Chairman and Chief Executive Officer.

The Shaw Group Inc. is a leading global provider of engineering, procurement, construction, maintenance, fabrication, manufacturing, consulting, remediation, and facilities management services for government and private sector clients in the power, process, environmental, infrastructure and homeland defense markets. The Company is headquartered in Baton Rouge, Louisiana and employs approximately 17,000 people at its offices and operations in North America, South America, Europe, the Middle East and the Asia-Pacific region. For further information, please visit the Company's website at

The Private Securities Litigation Reform Act of 1995 provides a "safe harbor" for certain forward-looking statements. The statements contained herein that are not historical facts (including without limitation statements to the effect that the Company or its management "believes," "expects," "anticipates," "plans," or other similar expressions) and statements related to revenues, earnings, backlog, or other financial information or results are forward-looking statements based on the Company's current expectations and beliefs concerning future developments and their potential effects on the Company. There can be no assurance that future developments affecting the Company will be those anticipated by the Company. These forward-looking statements involve significant risks and uncertainties (some of which are beyond our control) and assumptions and are subject to change based upon various factors. Should one or more of such risks or uncertainties materialize, or should any of our assumptions prove incorrect, actual results may vary in material respects from those projected in the forward-looking statements. The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. A description of some of the risks and uncertainties that could cause actual results to differ materially from such forward-looking statements can be found in the Company's reports and registration statements filed with the Securities and Exchange Commission, including its Form 10-K and Form 10-Q reports, and on the Company's web-site under the heading "Forward Looking Statement". These documents are also available from the Securities and Exchange Commission or from the Investor Relations department of Shaw. For more information on the company and announcements it makes from time to time on a regional basis visit our web site at

    CONTACT: The Shaw Group Inc., Baton Rouge
             Laurie LaChiusa, 225-932-2500
    SOURCE: The Shaw Group Inc.
"Safe Harbor" Statement under the Private Securities Litigation Reform Act of 1995: Statements in this press release regarding SHAW GROUP INC's business which are not historical facts are "forward-looking statements" that involve risks and uncertainties. For a discussion of such risks and uncertainties, which could cause actual results to differ from those contained in the forward-looking statements, see "Risk Factors" in the Company's Annual Report or Form 10-K for the most recently ended fiscal year.

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