Legal Proceedings

Severn Trent PLC
18 August 2000


Severn Trent Plc announced today that it intends imminently to commence
legal proceedings against Dwr Cymru, the regulated UK water business of
Hyder Plc.  Severn Trent believes that the proposed contract between Dwr
Cymru and the company referred to as 'UU Co', announced by WPD on 26 June
2000 in its offer document to acquire the whole of the share capital of
Hyder Plc, breaches European and UK procurement regulations.  Severn Trent's
case is that the proposed contract should have been put out to competitive
tender.

Brian Duckworth, Managing Director of Severn Trent Water Limited, said

'We are seeking legal clarification as to whether the arrangement for the
supply of operating and maintenance services by UU Co to Dwr Cymru,
incorporated in WPD's proposed acquisition of Hyder Plc, creates a
sustainable model for the industry as a whole.  We believe that it does not.
We are concerned that any model which introduces competition into the water
industry must be capable of being replicated - if it is not, we believe that
unfair competitive advantage may be gained by the supplier to Dwr Cymru.
This proposed arrangement has created a lot of uncertainty for the industry
and therefore it's important that the situation is clarified as soon as
possible, so that a level playing field is established for all players.'

For more information please contact:
Brian Duckworth                                0121 722 4440
MD, Severn Trent Water Limited
Peter Davies                                   0121 722 4947
Company Secretary, Severn Trent Plc
Alan Costin                                    0121 722 4429
Group Finance Director, Severn Trent Plc       01494 556423(Friday only)