Long term technology agreement signed between ALSTOM and
Rolls-Royce

ALSTOM and Rolls-Royce today
announce that they have signed a long term technology agreement
which will enable ALSTOM to use Rolls-Royce aeroengine
technology in the development of its heavy duty gas turbine
product range.

This agreement is in line with
ALSTOM's long term strategy to offer a highly competitive heavy
duty gas turbine product range to address the largest segment
of the global power generation equipment market.

Rolls-Royce engines operate using
very high temperature technologies, advanced aerodynamics and
very high strength/high temperature materials. The expertise
and knowledge in these areas gained by Rolls-Royce in
developing its world leading aero engines will be applied to
ALSTOM's heavy duty gas turbines to improve efficiency, power
output and durability.

Access to these enhanced
technology solutions will strengthen ALSTOM's future
competitive position in the heavy duty gas turbine market and
result in economies of scale in the Company's research &
development spending.

In addition to technology access,
Rolls-Royce will also provide engineers to assist ALSTOM in the
application of technology on specific development projects. A
joint design team is in place in ALSTOM's office in Derby,
UK.

Rolls-Royce will be compensated
for initial access to technology by payments spread over a
number of years. In addition, royalties will be paid on future
product sales. Specific financial details were not
disclosed.

Alexis Fries, President of
ALSTOM's Power Sector, commented: 'We are very pleased to have
established this close relationship with the aero technology
leader. I believe the new, more competitive products which will
result from this strategic initiative will enable us to
increase significantly our market share over the years to
come.'

Mike Howse, Rolls-Royce Director
of Engineering and Technology said: 'This agreement is a
further step in our strategy of gaining maximum benefit from
our unique gas turbine technology and know-how over a broader
market. Under this arrangement we can gain value for our
technology in the heavy duty gas turbine sector where we do not
compete.'

ALSTOM is the global
specialist in energy and transport infrastructure. The
Company serves the energy market through its activities in
the fields of power generation, power transmission and
distribution and power conversion and the transport market
through its activities in rail and marine. Following the
sale of its electrical contracting activity, finalised on
20 July 2001, ALSTOM has annual sales in excess of 22
billion euros and employs 120,000 people in over 70
countries.

The Company is listed on the Paris, London and New York
stock exchanges.

Rolls-Royce is a global
company providing power for land, sea and air. It employs
some 42,000 people in more than 30 countries, including
over 26,000 in the UK, 5,000 in the rest of the Europe and
over 8,000 in North America. The company has a balanced
business portfolio with leading positions in civil
aerospace, defence aerospace, marine and energy markets.
With annual sales of around £6 billion and a forward
order book of nearly £15 billion, its technology is
applied over a wide range of products which generate
high-value services throughout their operational
lives.

Press enquiries:
G. Tourvieille/S. Gagneraud

(Tel. +33 1 47 55 23 15 )

internet.press@chq.alstom.com

Investor relations:
R. Shaw

(Tel. +33 1 47 55 25 78)

investor.relations@chq.alstom.com

Internet :
http://www.wcm.alstom.com