SABESP Announces Relevant Notice.

SAO PAULO -- SABESP (NYSE:SBS) (BOVESPA:SBSP3) informs and clarifies its shareholders and the market in general that:

(i)   on March 24, 2005, it made available to the Securities and
      Exchange Commission of Brazil (the "CVM") and to the Sao Paulo
      Stock Exchange (the "BOVESPA"), by means of the Periodical and
      Eventual Information System (the "IPE"), the Company's
      Management proposal for the allocation of the net income for
      the year ended December 31, 2004, as well as on the transfer
      of the retained earnings balance to the investment reserve,
      which is subject, however, to the approval of the Company's
      shareholders who shall meet at the Annual and Extraordinary
      General Meeting as of April 29, 2005, to resolve on this and
      other issues;

(ii)  the content of the Management's proposal is as follows:

      "The proposal of allocation of the net income for the year
       2004 is in conformity with the Article 192 of the Law
       6,404/1976 and amendments:

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   Net income for the year                    R$ 513,028,255.11
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  (+) Realization of the Revaluation Reserve  R$ 104,499,586.67
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  (-) Interest on Own Capital                 R$ 152,935,332.45
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  (-)Legal Reserve 5%                         R$ 25,651,412.76
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      In order to meet the Company's investment needs for the years
      2005 to 2007, at the amount of R$ 2,390.0 million (estimated
      in the Company's Multiyear Plan 2004 - 2007 Capital Budget),
      we propose to transfer R$ 438,941,096.57 of the Retained
      Earnings balance to the Investment Reserve."

(iii) an incorrect information was unduly sent to the CVM and the
      BOVESPA, by means of the IPE, reference (a) to "R$ thousand" in
      the table which informs on the "Net income for the year"; and
      (b) that the Company's investment needs estimated at the amount
      of R$ 2,390.0 million refer to the Multiyear Plan 2004 to 2007
      Capital Budget.

(iv)  the Company's financial statements relating to the fiscal year
      ended December 31, 2004 shall be published on March 29, 2005.