Group Strategy Presentation

Thames Water PLC
18 January 2000


                    THAMES WATER PLC
      THE WAY FORWARD - GROUP STRATEGY PRESENTATION

Thames Water today announced its strategic plan following
the  outcome  of the Ofwat price review late  last  year.
Roger Carr, Chairman of Thames Water Plc said:

'With  the Ofwat review behind us it is time to focus  on
the  future  of  the group and outline our  strategy  for
continuing  to  deliver shareholder value  and  excellent
customer service.

'The  core  of our strategy is based on our expertise  in
water and water-related products. Our twin challenges are
to  deliver  excellent service to our UK water  customers
and  to accelerate the development of Thames Water  as  a
leading  competitive  force in  the  international  water
market.'

Key points from today's strategy presentation include:

*   Utility focused on achieving all of its targets, and
    outperforming Ofwat's efficiency assumptions

*   Thames to win competitive business at home and abroad

*   At least 30% of profits to come from outside the
    regulated Utility

*   Progressive dividend policy to continue

*   Build shareholder value

Key financial ratio projections include:

*   Interest cover range of 2.5x to 3.0x

*   Cash interest cover range of 3.5x to 4.0x

*   Dividend cover range of 1.2x to 1.5x


Bill Alexander, Chief Executive of Thames Water Plc said:

'We begin the new millennium from a position of strength:
the  Group  is financially sound with positive prospects.
Our  customers have the lowest bills in the UK  and  will
benefit   from  significant  new  investment  to  further
improve services and the environment.

'As part of our efficiency programme staff numbers in the
UK Utility will continue to fall by around 200 each year.
The  majority of the reductions will be achieved  through
normal  staff  turnover. Employees across the  Group  now
number  some  14,000,  up  from  8,000  at  the  time  of
privatisation, and will continue to grow.

'Our  international  operations are the  fastest  growing
part  of  the Thames Water Group. At present 9.8  million
international customers are being served - a figure  that
will be boosted by the recently announced acquisition  of
US  water  utility E'town and the stake in Chilean  water
company ESSEL.

A presentation for investment analysts will be held today
at  9.00am  at  Smeaton's Vaults, The  Brewery,  Chiswell
Street,  London  EC1. This will be followed  by  a  Press
conference at 11.00am. A copy of the presentation will be
available  on  the  Thames Water  website  from  9.30  am
-(www.thames-water.com).

A  conference call for analysts and shareholders will  be
held  today  at 4.00pm. Please call Charlotte  Fisher  at
Bell   Pottinger  on  0207  353  9203  if  you  wish   to
participate.


For further information contact:

Thames Water Plc
David Luffrum  
Finance and Planning Director
Tel: [phone]

Liz Christie   
Head of Investor Relations
Tel: [phone]

Matthew Moth   
Bell Pottinger
Tel: [phone]