SEVERN TRENT OPENS WORLDWIDE
HEADQUARTERS IN HOUSTON

Rennie Quinn, David Arculus, Vic CockerHOUSTON, TX, September 25, 1998 Severn Trent Services Inc. a new American holding company created for UK-based Severn Trent’s U.S. utility industry operations, announced today the establishment of its international headquarters in Houston. Attending the dedication were Severn Trent Chairman of the Board David Arculus (center), Severn Trent Chief Executive Vic Cocker (right) and Rennie Quinn (left), Severn Trent Services Director who is based in the Houston office.

The move signals Severn Trent’s intention to capitalize on the growth of public-private partnerships and competitive contracting of water utility services. Severn Trent Plc, a British-based $1.7 billion leader in the water, wastewater and utility services industry, generates approximately $400 million in annual revenues domestically through the seven companies that comprise Severn Trent Services Inc. The company intends to grow revenues to $1 billion by 2005 through controlled expansion and public-private partnerships, supported by strong regulatory compliance leadership, superior customer–service and competitive pricing.

"The U.S. is an important market for our company," said David Arculus, chairman of Severn Trent Plc. "In establishing Severn Trent Services’ international headquarters here, we are affirming our commitment to our U.S. investments and to achieving a leadership position in today’s emerging competitive marketplace."

Although an American company, Severn Trent Services’ British ties offer a distinct advantage in terms of experience with the intricacies and issues surrounding privatization of water services. When the UK’s public sector water utilities were privatized ten years ago, the British government’s decision was driven by the same market forces that American mayors, governing councils and businesses are tackling today.

"Like their British counterparts, American officials who have responsibility for the delivery of water utility services to customers are concerned with capital investment, asset management, operating efficiencies, environmental protection, competitive contracting, employee education, social responsibility and delivery of consistently safe water, wastewater and environmental services," said Rennie Quinn, Severn Trent Services Director. "Severn Trent offers this expertise and the UK experience which it can utilize to help customers achieve their business objectives."

Severn Trent Services’ introduction to the U.S. market has been well-received by government officials from all levels, with financial investment and employment opportunities topping the list of reasons for support.

"Our Republican Congress strongly advocates privatization and I am aware of the success of the privatization of the British water and waste water utilities," said U.S. Congressman Bill Archer. "Severn Trent’s UK operational expertise should be increasingly attractive to municipalities and counties throughout the U.S. if it is approached on the basis of private-public partnerships, managed competition and superior customer services."

About Severn Trent Services

Severn Trent Services Inc is the American holding company for Severn Trent Plc’s U.S. companies operating in the water, wastewater and utility industries. The companies that comprise Severn Trent Services are grouped into three strategic business units: Severn Trent Water International, Severn Trent Systems and Severn Trent Technology. Each division includes its own separate companies: Severn Trent Water International comprises Severn Trent Environmental Services and Pitometer; Severn Trent Systems comprises Severn Trent Systems and Stoner Associates; and Severn Trent Technology comprises Capital Controls Group, Fusion Meters and Severn Trent Laboratories. Through these companies, Severn Trent Services employs 1,350 Americans.

About Severn Trent Plc

Severn Trent Plc is one of the world’s leading water, waste and utility service companies with $1.7 billion in revenues. Moreover, the company helps to improve the environment for more than 20 million people around the world. Headquartered in Birmingham, England, and listed among the top 100 companies in the UK, Severn Trent Plc operates four divisions: Severn Trent Water, Biffa Waste Services, Severn Trent Services and Severn Trent Property. The company employs more than 10,000 people, primarily in the UK, the rest of Europe and North America.