Jeff

I understand you are meeting Rory Cullinan of RBS tomorrow. The attached
note summarises where we have got to on the Wessex sale.

The serious buyers who can deliver quickly are the large financial
institutions. All are talking about offers in the region of a RAB value of
?1.26 billion. This is the last published RAB, the current value is ?1.3
billion - RAB grows with approved CAPEX and inflation.

My recommendation is that if we have sorted the Marlin issues, we should
move quickly with RBS and/or WestLB. They both have the experience, the
resources and the commitment to do a deal quickly. Both are proposing
structures that should be acceptable to the Regulator and the Wessex Water
Services Board. We may also want to add Barclays to this list although they
are slower in getting going.

If you need any further information, please give me a call.

Colin

<<progress report.doc<<

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- progress report.doc