The British water regulator, OFWAT, has announced its decision concerning water price cuts in the United Kingdom over the next five years (2000-2005). This decision follows a first statement of intent released in July 1999. Customers of Northumbrian Water Group, a 70 percent-held subsidiary of Suez Lyonnaise des Eaux, will be paying less for their water as from April 2000. Prices will remain stable for the four years thereafter.

For Essex & Suffolk Water, a subsidiary of Northumbrian Water Group, the price of water will be cut by 13.8 percent*. For the other subsidiary, Northumbrian Water Limited, the price of water will be cut by 19.4 percent*. In July 1999, OFWAT had announced its intention to cut these prices by 19* and 25 percent* respectively.

OFWAT has accepted some of the economic arguments put forward by Suez Lyonnaise des Eaux. This decision will impact Suez Lyonnaise des Eaux's earnings more favorably, and is expected to improve net income Group share, for the year 2000 by approximately EUR 10.7 million compared with the forecasts made in July 1999.

Suez Lyonnaise des Eaux has noted OFWAT's decision. Northumbrian Water Limited and Essex & Suffolk Water will examine OFWAT's definitive proposals in detail. They have two months in which to appeal the decision.

* Percentages not adjusted for inflation.