Statement re OFWAT

RNS Number:5174Q
East Surrey Holdings PLC
03 October 2003


                            East Surrey Holdings PLC


                    STATEMENT REGARDING AGREEMENT WITH OFWAT

                         FOR THE CHARGING YEAR 2004/05


In February 2002 East Surrey Holdings plc announced that its subsidiary Sutton
and East Surrey Water ("SESW") had entered into an agreement with Ofwat to
adjust its prices annually if certain specified costs outside the control of the
company differed from the amounts allowed in its price determination for the
five year period 2000/05. In accordance with this agreement SESW increased its
charges by 2.1% and 1.2% less than the allowed amounts in 2002/03 and 2003/04
respectively.

SESW has now agreed with Ofwat that a further reduction in charges is
appropriate for 2004/05. However, in view of the forthcoming price review for
the five-year period 2005/10, it has been agreed that the adjustment to SESW's
charges for 2004/05 should be carried forward and taken into account in the
calculation of prices for 2005/10.

The total impact of this adjustment over the five-year period 2005/10 will be
#1.16m (equivalent to #0.23m pa) before tax in 2002/03 prices.


                                     -ends-

Date: 3 October 2003

For further information contact:
East Surrey Holdings plc                                    City Profile
Phil Holder, Managing Director                              Simon Courtenay
Nick Fisher, Finance Director                               Tel: [phone]
Tel: [phone]
Web: www.waterplc.com



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