48HO Mid Kent Wtr4%

RNS No 0725q
MID KENT HOLDINGS PLC
27 July 1999
                                       
 
          Response to Ofwat Draft Determination of Water Prices
                                       
Mid Kent Holdings PLC ("the Company") has today received the Director General
of  Water  Services' draft determination of water prices in respect of the
Company's  wholly  owned subsidiary, Mid Kent Water plc, for the five year
period commencing 1 April 2000.

The Company is both concerned and disappointed that the Director General has
determined  price  increase limits ("K" factors) of minus 22.3%;  minus  1.0%;
minus  4.8%;  0% and plus 2% for each respective year between 2000  and  2005.
This  is in contrast with the Water Company's own proposed "K" factors of plus
2.8% in year one and plus 3.7% in years two to five, which it submitted to the
Director  General in its Corporate Plan, a summary of which was  published  in
April of this year.

The  Company  also  notes that the Director General has  proposed  significant
price  reductions for many companies in the South East of England where  water
resources  are under considerable stress and where the economy is growing.  It
does  not  consider  that this is in the best interests of  customers  in  the
longer term.

Over the next few months, the Company will be seeking further clarification of
the Director General of  Water Services' determination  and  will be analysing
in-depth  the  information  contained  in  his  draft  document.  During  this
process,  the  Company  will  endeavour  to  ascertain  full  details of its
obligations under the draft determination, including the  capital  investments
required to ensure that the expectations of the  Company's  customers are  met
and  that  an  acceptable  return  can be provided to  the  Company's   public
shareholders.

In  November  of  this year, the Director General will issue his  final  price
determination and at that point the Company will have two months in  which  to
decide  whether  to  accept the price limits or to appeal to  The  Competition
Commission. In the intervening period, the Company will be pressing  its  case
for fair treatment and a satisfactory outcome for all its stakeholders.

Enquiries:
Geoff Baldwin, Chief Executive
Bob Atwood, Finance Director
Mid Kent Holdings PLC                Tel: 01634 873000

Paul Vann
Binns & Co                           Tel: 0171-786 9600


END

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