Response to OFWAT Charges

SEVERN TRENT PLC
27 July 1999


SEVERN TRENT PLC

Severn Trent Plc today issued its initial response to the draft determination
of water charges for the five years beginning April 2000 announced by Ian
Byatt, Director General, Office of Water Services.  The Director General has
determined that Severn Trent Water should reduce its charges to customers by
14.1 per cent in April 2000, with a further reduction in real terms of 1.0 per
cent per annum in each of the two subsequent years.

Commenting on the draft determination, Group Chief Executive, Vic Cocker,
said:

'Uniquely amongst the water and sewerage companies Severn Trent had offered a
5 per cent price cut.  This is a larger reduction than we had envisaged but we
recognise that this is a serious plan from the Regulator and we shall be
discussing with OFWAT the extent to which we can marry their suggestions with
all our responsibilities to our customers and the environment.'

The Company is holding a briefing for investment analysts and fund managers at
the offices of HSBC, Vintners Place, 68 Upper Thames Street, London EC4 on
Thursday, 29 July at 4.45pm.

Enquiries:
Vic Cocker, Group Chief Executive    0121 722 4176
Alan Costin, Group Finance Director  0121 722 4429
James Bradley, Brunswick             0171 404 5959