Cooperation Agreement Announced Between Bielsko-Biala, IWL and UUIL.

BIELSKO-BIALA, Poland--(BUSINESS WIRE)--Nov. 22, 1999--

The Municipality of Bielsko-Biala, together with International Water (UK) Limited (IWL) and United Utilities International Ltd. (UUIL), announced today that a Cooperation Agreement was signed under which IWL & UUIL, through the acquisition of approximately 25% of shares in Aqua S.A., become strategic partners in the company.

Aqua S.A. is the water and wastewater utility serving the Bielsko-Biala area of Southern Poland.

IWL and UUIL, through their direct involvement in the company's management and operations, will provide Aqua with the expertise and know-how required to further improve the company's standing, and in particular the quality of water and wastewater services in the region.

"We are pleased to have reached agreement with the municipality to be its co-investor and strategic partner," said Didier Quint, managing director of International Water Limited. "We will enhance Aqua's water and wastewater systems and help them continue their improvements in operating and commercial performance."

The City of Bielsko-Biala, with an estimated population of 200,000 people, is one of the largest cities in the south of Poland and Aqua's total service area includes a population of more than 300,000. Aqua has been engaged in a capital investment program, largely funded through a World Bank loan, aimed at upgrading its facilities and installing improved management systems. The utility is recognized as one of the best run and most efficient in Poland.

Under the terms of the purchase agreement, IWL and UUIL will provide technical and commercial advisory services to Aqua as part of their investment in the company.

"We intend to build on Aqua's outstanding record of service and efficiency and to foster a strong relationship with the local communities that it serves," said Gordon Waters, managing director of United Utilities International. "We want to demonstrate our commitment to becoming an integral part of the community. We also share Aqua's desire to expand the company's service area to include other neighbouring communities."

Background

IWL, UUIL and their affiliates provide water and wastewater services to 7 million people in the UK, and more that 23 million others worldwide, by operating and maintaining water utility assets in the Philippines, Australia, Bolivia, Mexico, Malaysia and the UK.

IWL is substantially owned by Bechtel Enterprises Holdings, Inc., who recently announced plans to sell 50% of their stake to Edison S.p.A. of Italy.

IWL provides a wide range of specialist services for water and wastewater industries, including

--   Project development, financing and management
--   Engineering, procurement and construction management
--   Operations and maintenance
--   Ownership and asset management

Bechtel Enterprises Holdings, Inc. is the project development, finance, ownership, and asset management entity of the Bechtel organization, a major international engineering and construction company headquartered in San Francisco. It has developed 46 privatized infrastructure projects with a total constructed value exceeding $18 billion. Since 1990, Bechtel Enterprises has participated in arranging more than $15 billion in project financings. In 1998, Bechtel had revenues of $12.6 billion.

United Utilities International (UUI) is a part of the United Utilities Group of Companies, which provides services in water, wastewater, electricity distribution, electricity and gas supply, telecommunications and business operations outsourcing. It employs more than 7,000 staff in 10 countries. UUI maintains a strategic alliance with IWL, through which it operates IWL's facilities, and invests in selected projects.