York Waterworks Plc A summary of our Business Plan Submission to Ofwat - April 1999

OVERALL STRATEGY FOR THE AMP3 PERIOD AND TOP STRATEGIC OBJECTIVES 1. Continue to provide levels of service to customers which will be recognised by them, and by Ofwat, as being amongst the best in the country. 2. Achieve the highest level of compliance with the Water Quality Regulations that is reasonably practicable. 3. Increase the mains renewal rate from 0.3%pa in the present 5 year period to 0.5% in the next, as part of a phased increase to achieve a renewal rate of 1%pa in 2010/11. 4. Meter new household supplies installed from April 2000, and prepare to install meters free of charge under the forthcoming legislation.

PROPOSED PRICE LIMITS & EFFECT ON AVERAGE BILLS								TOP 5 QUALITY IMPROVEMENTS IN 2000-2005 PERIOD
		2000-01	2001-02	2002-03	2003-04	2004-05
1	Proposed Price Limit (Water Service)	2.9%	2.9%	2.9%	2.9%	2.9%
2	Average Household Bill (today's prices)	88.57	89.48	91.52	93.15	95.05
3	Average Household Bill paid	96.99	100.39	105.25	109.82	114.83
1	Proposed Price Limit (Sewerage Service)
2	Average Household Bill (today's prices)
3	Average Household Bill paid

	PROJECTED EXPENDITURE NEEDS	Annual average for the AMP3 period (£/property/annum)			WHAT IS DRIVING THE CHANGES IN BILLS	£
1	Total Operating Expenditure - annual average	57.05		Average household bill in 1999-2000		89.06
2	Total Capital Maintenance Expenditure - annual average	47.32		Less	(1) passing on past out-performance	4.31
3	Total Capital Enhancement Expenditure - annual average	12.72			(2) challenging targets for future efficiency improvements	3.00
				Plus	(3) the impact of improvements in water quality	6.17
	RETURN CAPITAL	Annual average for the AMP3 period			(4) improvements in service performance	0.00
	Return on capital - (post tax) (%)	7.0%			(5) Maintaining security of supplies to all customers	7.13
				Average household bill in 2004-2005		95.05

For further information contact: John Haley, Landing Lane, York YO26 4RH