ASTV and the City of Tallinn have signed the water supply and sewerage network extension plan of the City


Mayor Edgar Savisaar, Chairman of the Board of ASTV Roch Chéroux and the        
representative of the major shareholder United Utilities Bob Gallienne have     
signed the amendments to the Services Agreement today at the Town Hall. The     
amendments shall significantly accelerate the construction of the sewerage      
network and ensure the provision of the sewerage network for the areas          
established earlier i.e. the houses built based on the construction permit      
issued before 22 March 1999, within the Tallinn PWS Development Plan approved by
the Tallinn City Government, by the end of March 2011.                          

The amendments to the agreement places the responsibility for the water supply  
and sewerage network construction programme, in the areas established earlier   
set out in the Tallinn PWS Development Plan approved by the City, on the water  
company. The period of the Services Agreement shall be extended to 2020.        

The City of Tallinn and the water company agreed that the K-coefficient would be
fixed as per the existing Services Agreement for the period of 2008-2010 and at 
0% for the years 2011-2020.                                                     

Based on the Public Water Supply and Sewerage Act, the development costs of the 
areas established earlier shall be recovered from the revenue generated from the
tariffs.                                                                        
According to the amendments, from March 2008 onwards, the development component 
shall be added to the invoices to be issued to the domestic customers for water 
supply services.                                                                

As the City of Tallinn shall compensate the development component in full, this 
amendment shall bring no changes for the customers and end-users regarding the  
tariffs.                                                                        

The total cost of the water supply and sewerage project in line with the Tallinn
PWS Development Plan is 1.4 billion kroons including VAT and the Company has    
taken the obligation to deliver it by March 2011.                               

The amendments signed today ensures the revenue visibility of the company until 
2020, as the Services Agreement is extended by 5 years and the K-coefficient    
shall be fixed until the end of the contract period. The financial costs related
to this project are also covered.                                               

Additional information:                                                         

Reigo Marosov                                                                   
Head of Communication                                                           
+372 6262 209                                                                   
reigo.marosov@tvesi.ee                                                          

Eteri Harring                                                                   
Head of Treasury and Investor Relations                                         
+372 6262 225                                                                   
eteri.harring@tvesi.ee