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Shaw Announces $204 Million Contract for U.S. Air Force Housing Privatization
    BATON ROUGE, La.--(BUSINESS WIRE)--July 27, 2004--
    Shaw Infrastructure, Inc. Joint Venture to Build/Renovate 1,344
      Military Family Homes at Beale Air Force Base in California

The Shaw Group Inc. (NYSE:SGR) announced today that American Eagle Communities, LLC, a joint venture owned 50 percent by Shaw Infrastructure, Inc. and 50 percent by CEI Investment Corporation, has been selected by the U.S. Air Force for a $204 million privatization contract. Under the contract, American Eagle Communities will provide housing development, design, construction, operations and maintenance services at Beale Air Force Base, located approximately 45 miles north of Sacramento, California.

The privatization venture will comprise 1,344 existing military family housing units, including construction of 585 new homes and the refurbishment of the 759 existing residences along with related improvements and land for the construction of new units. The project will provide flexible living spaces and amenities consistent with those found in the private sector. Work will also include the construction of a town hall center and neighborhood clubhouses as well as other outdoor recreation facilities and green spaces. Construction is expected to begin in 2005 with an approximate six-year initial construction phase. American Eagle Communities will operate and maintain the homes under the fifty-year contract which is expected to generate revenues in excess of $1 billion over the term.

Diana Severs Ferguson, President of Shaw Environmental & Infrastructure commented, "This is our seventh military housing privatization win in just over a year. We are proud to receive this award from the United States Air Force and to once again be selected to provide quality housing for our military families."

Ms. Severs Ferguson continued, "The federal marketplace is shifting with an increased focus on privatization and we are seeing this trend in a range of services including transportation and utilities. Shaw's expertise and portfolio of integrated capabilities give us a strong competitive advantage in this expanding industry."

Beale Air Force Base is recognized as one of the U.S. Air Force's most important bases. Assigned to the Air Combat Command, Beale is home to the Air Force's U-2 reconnaissance wing, a reserve KC-135 wing, the Deployable Ground Station, and the 7th Space Warning Squadron (a ballistic missile warning facility). The base covers more than 23,000 acres and is home to approximately 4,000 military personnel.

American Eagle Communities, LLC is comprised of Shaw Infrastructure, Inc. and CEI Investment Corporation. Shaw Infrastructure, Inc. is a leading infrastructure and Department of Defense (DoD) services provider and an established DoD business partner. Shaw Infrastructure, Inc. is a subsidiary of The Shaw Group, listed among Engineering News Record's "Top 20" E&C; companies in the world. CEI is a privately-held real estate business that has developed more than 35,000 homes across the United States. CEI has fifty years of 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 provider of consulting, engineering, construction, remediation and facilities management services to government and private sector clients in the environmental, infrastructure and emergency response markets. The Shaw Group is also a vertically integrated provider of comprehensive engineering, consulting, procurement, pipe fabrication, construction and maintenance services to the power and process industries worldwide. A Fortune 500 company with $3.3 billion in revenues in 2003, The Shaw Group debuted on the magazine's "America's Most Admired Companies" list in 2004. Shaw 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. Additional information on The Shaw Group is available 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 Statements". 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.
             Chris D. Sammons, 225-932-2546
    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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