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The Shaw Group Subsidiary Awarded $111 Million Housing Privatization Contract By U.S. Air Force
    BATON ROUGE, La.--(BUSINESS WIRE)--Jan. 26, 2004--
       Shaw Infrastructure, Inc. Joint Venture to Build/Renovate
       1,200 Military Family Homes at Little Rock Air Force Base

The Shaw Group Inc. (NYSE: SGR) today announced that Little Rock Family Housing, LLC, a 50/50 joint venture between subsidiary Shaw Infrastructure, Inc. and CEI Investment Corp., was recently selected by the U.S. Air Force to build and renovate 1,200 homes at Little Rock Air Force Base under the 1996 Military Housing Privatization Initiative. The contract, which is expected to be finalized in February, includes a $111 million residential development contract and a fifty-year operations and maintenance agreement under which Little Rock Family Housing will provide comprehensive resident care services for military families living in Little Rock Air Force Base's privatized residential community. The project is scheduled to begin in March 2004 and is expected to generate revenues to Little Rock Family Housing in excess of $1 billion during the fifty-year term.

"We are honored to be entrusted by the United States Air Force and Little Rock Air Force Base to provide quality housing and an enhanced quality of life for its dedicated military families," stated Diana Severs Ferguson, President of Shaw Environmental and Infrastructure, Inc. "We are pleased to once again be partnered with CEI on what is now our third privatization contract in less than one year and believe our community development experience and proven relationship with the DOD give us a distinct competitive advantage on future privatization projects."

Under the terms of the contract, Little Rock Family Housing will serve as program manager for the project and receive operational support from the parent corporations. The plans developed by Little Rock Family Housing include building new homes, as well as upgrading existing homes to provide flexible living spaces and amenities consistent with those found in the private sector. The new development will feature a Town Hall Center and Neighborhood Clubhouses, as well as other outdoor recreation facilities.

Headquartered in Meriden, Conn., CEI Investment is a 50-year-old family-owned business that has developed more than 35,000 homes across the United States. The company has extensive expertise in the development and management of master-planned communities, multi-family communities, as well as communities committed to environmental preservation.

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 14,800 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 www.shawgrp.com.

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 website 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 website at www.shawgrp.com.

    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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