Increase in Ayrshire PFI

Northumbrian Water Group PLC
23 December 2005


23 December 2005

                       Northumbrian Water Group plc (NWG)

       Increased investment in Ayrshire private finance initiative (PFI)

NWG announces that it has today increased its shareholding in Wastewater
Management Holdings Limited (WMH) from 50% to 75% and in Ayr Environmental
Services Operations Limited (AESOps) from 75% to 100%. Under the terms of the
Share Purchase Agreement between NWG and Suez, dated 16 May 2003, it was agreed
that upon satisfaction of a number of conditions, NWG would purchase the shares
in both companies from Degremont Limited (a subsidiary of Suez). The calculation
for quantifying the consideration was set out in that agreement. Based on those
calculations NWG has acquired the shares for a cash consideration of £3.3
million.

WMH is the holding company of Ayr Environmental Services Limited (AyrES), the
project company of a PFI contract with Scottish Water for waste water treatment.
The remaining 25% in WMH is held by Amec plc. AESOps is the operations
subcontractor to AyrES.

Following the transaction, WMH will be consolidated into the financial
statements of NWG. Consolidated net debt will increase by around £70 million
(3.5%).


For further information contact:

Northumbrian Water                           0191 301 6367
John Cuthbert, Managing Director
Alistair Baker, Communications & PR Manager

Finsbury                                     020 7251 3801
Andrew Mitchell
Sally Hogan




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