BM50 Sutton E.s.bds

RNS Number:3991Y
East Surrey Holdings PLC
07 May 2004


                            East Surrey Holdings PLC

                              STATEMENT REGARDING
                          SUTTON AND EAST SURREY WATER


The Director General of the Office of Water Services ("Ofwat") will today
release summaries of the Final Business Plans of all the Water and Sewerage and
Water Only companies for the five-year period 2005/10 including that of Sutton
and East Surrey Water. The Director General is expected to issue his response to
the plans on 5 August in the form of Draft Determinations of prices. The
companies will then have until 15 September to respond to the Draft
Determinations, and the Director General plans to issue his Final Determinations
of prices on 2 December. Companies then have two months to consider their Final
Determinations. In the event that a determination is not accepted, the
Competition Commission is asked to determine the prices for the five-year period
2005/10.

Sutton and East Surrey Water will today place on its website the Executive
Summary and the Strategic Overview sections of its Final Business Plan. These
sections explain the Company's approach to the preparation of its plan, the
basis of the proposed expenditure included in the plan, the material
uncertainties that currently remain, and its view of how various issues should
be approached. The plan includes price increases for the five years 2005/06 to
2009/10 of 33%, 2.2%, 2.2%, 2.2% and 2.2%. A key unresolved issue is how
material uncertainties should be dealt with when determining prices. Sutton and
East Surrey Water's view is that they should be treated as Notified Items in the
Final Determinations.

Note

The Notified Item mechanism is intended to deal with situations where the
uncertainty about future events or costs is such that there is a likelihood of
significant differences between the costs, or income, allowed in a price
determination and the actual out-turn costs incurred by a company, or the income
it receives. Once the accumulated value of these differences exceeds a specified
value prices are re-determined (ie increased or decreased as appropriate) by an
Interim Determination of K ("IDOK").

The IDOK process is restricted to those items specified in the original price
determination as Notified Items together with changes in costs arising from new
or changed legal requirements not anticipated in the original price
determination ("Relevant Changes in Circumstance").

                                     -ends-

Date: 7 May 2004
For further information contact:

East Surrey Holdings plc                     City Profile
Phil Holder, Managing Director               Simon Courtenay
Nick Fisher, Finance Director                Tel: 020-7448-3244
Tel: 01737-772000
Web: www.waterplc.com
     ----------------



                      This information is provided by RNS
            The company news service from the London Stock Exchange

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